MONTHLY ENERGY OUTLOOK

December 2025

NATURAL GAS FUNDAMENTALS

US Storage

US natural gas storage levels as of the week ending November 21, 2025, stood at 3,935 Bcf, reflecting a net withdrawal of 11 Bcf. This is 23 Bcf (1%) below levels from the same week last year and 146 Bcf (4%) above the five-year average (2020-2024). Withdrawal rates mark the start of the heating season, with early draws lighter than anticipated due to mild weather. If draws align with five-year averages, end-winter inventories could remain elevated. Risks center on potential cold snaps accelerating withdrawals, while robust supply may temper deficits. Forward outlook indicates balanced storage supporting moderate prices unless severe weather emerges.

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US Production

Latest EIA data shows US dry natural gas production reached 108.2 Bcf/d in September 2025, up 6.3% from September 2024. Output has sustained record highs, with year-to-date averages exceeding 107 Bcf/d amid efficiency gains. Forecasts project steady levels around 108-109 Bcf/d into 2026, with emphasis on Appalachia and Haynesville basins as associated gas from Permian moderates. Sensitivities tie to futures pricing, where sustained highs could spur drilling. Risks include regulatory shifts and infrastructure bottlenecks, potentially constraining growth if export demand surges.

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US LNG

US LNG exports are projected to hit a record 10.7 million metric tons in November 2025, up 40% from prior levels, with feedgas flows nearing 17.8 Bcf/d. 2025 has marked a record for FIDs, with over 50 mtpa sanctioned, pushing capacity toward doubling by 2029. Recent advancements include Plaquemines Phase 2 and Corpus Christi Stage III nearing commercial operations. Implications point to heightened domestic demand pull, fostering tighter markets and price support, though global competition may cap gains if Asian uptake slows.

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Other Demand Drivers

2025 natural gas consumption forecasts indicate total demand averaging 91.4 Bcf/d, with electric power at 36.5 Bcf/d (over 40% of generation), industrial at 23.8 Bcf/d, residential at 13.2 Bcf/d, and commercial at 9.9 Bcf/d. Expectations for 2025-26 winter show modest declines due to warmer forecasts, but annual growth persists at 1%. Structural changes highlight AI and data center expansion (up to 80 GW by 2029) alongside electrification, bolstering power sector needs while renewables offset some baseload.

Natural Gas Forward Strip(s)

NYMEX Henry Hub futures as of December 1, 2025, show the prompt month (January 2026) at approximately $4.86/MMBtu, with winter strips elevated amid draws and exports. Prices have risen 13.89% monthly, reflecting seasonal momentum. Bearish factors encompass ample storage and steady production; bullish drivers include record LNG outflows and potential cold weather. Takeaway: Lock in forward positions for winter volatility, monitoring supply responses to avoid overextensions.

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POWER FUNDAMENTALS

Load | Demand Growth

Latest ISO forecasts signal accelerated electricity demand: ERCOT at 11% annual through 2026, PJM projecting summer peaks to 220 GW over 15 years (3.8% winter CAGR over 10 years), and MISO with revisions amid industrial surges. National CAGR hovers at 1.5-2%, but regional spikes could add 27 GW by 2030 in PJM. Drivers focus on data centers (80 GW aggregate) and manufacturing, straining resources in these hubs with risks from interconnection delays.

Forward Power Strip(s)

Forward power prices as of December 2025 reflect upward pressure, with PJM Western Hub December around $65/MWh, ERCOT spots elevated, and MISO forwards stable post-settlements. Drivers include load forecasts and gas dynamics. Weather outlook for December favors above-normal temperatures in the western CONUS and Southwest, with wetter North, potentially curbing heating loads. Spot averages remain variable in tight conditions. Outlook: Upside in winter forwards from growth; watch renewables for mitigation.

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