What’s Really Happening with Energy Prices Right Now?

1. Iran Conflict – Why Haven’t Prices Spiked?

You’d expect war in the Middle East to send energy prices soaring—but that hasn’t really happened. Why? Simple:

• The U.S. is producing record levels of oil and natural gas
• We’re far less dependent on foreign energy than we used to be
• Global  markets are nervous—but not disrupted (yet)

Bottom line:  No major supply disruption = no major price spike

 

2. Could High Oil Prices Actually LOWER Natural Gas Prices?

This sounds backwards—but it’s very possible.

When oil prices rise:

• U.S. producers drill more oil wells
• Those wells produce “associated” natural gas as a byproduct

That means:

• More oil → more natural gas supply
• Even with strong LNG exports → extra gas stays in the U.S.

Bottom line:  Higher oil prices could actually help create a natural gas surplus

 

3. Storage Season Is Starting – A Key Turning Point

April begins natural gas injection season (when we refill storage for winter).

At the same time:

• LNG exports are near record highs
• Summer electric demand (A/C) is about to ramp up

BUT… If production stays strong: We could go from a feared shortage → to a comfortable surplus

 

4. Will Power Prices Follow Natural Gas This Summer?

Historically:

• Electricity prices closely follow natural gas prices

But this summer, they may separate more than usual because:

• Power demand spikes from air conditioning
• Power Grid stress spurred by growing AI Data Center Demand
• PJM Capacity costs are rising sharply – up over 1000% in 2 years

Bottom line:  Natural gas prices could stay stable or fall—even if electric prices rise during peak and overall growing demand

 

5. El Niño – What It Could Mean for Next Winter

Forecasts suggest a growing El Niño, possibly strengthening into winter.  Model consensus is forecasting a Super El Nino by next winter

Typical impact:

• Warmer Midwest & Northeast winters
• Less extreme cold snaps
• Lower heating demand

If this happens AND storage is full:  Natural gas prices could be softer next winter

 

6. Why Aren’t Global Prices Driving U.S. Prices Higher?

Great question—and one we hear often.

The U.S. is now:

• The world’s largest natural gas producer
• A  major LNG exporter

But:

• Most U.S. natural gas is still used domestically
• Infrastructure limits how much natural gas (LNG) can be exported quickly

Bottom line:  We’re partially insulated from global natural gas and power price spikes

 

7. AI Data Centers – Still a BIG Deal

The demand story hasn’t changed:

• AI and data centers are driving massive electric load growth
• New generation (power plants) is not keeping up yet

Some progress:

• Faster approvals for new generation
• Increased focus on demand response and grid reliability

But overall:  Demand is still growing faster than supply

 

8. What This Means for Ohio’s natural gas and power consumers

Short-Term (Spring/Summer 2026):

• Natural gas: Stable to potentially lower
• Electricity: Volatile during peak summer demand

Looking Ahead to Winter 2026–2027:

• • If production stays high + El Niño develops:
    Better supply outlook than expected
  • Potential  for moderated natural gas pricing

BUT…

• Long-term pressure remains from:
  • AI-driven  demand
  • Capacity cost increases
  • Grid constraints

Final Thought

The energy market right now is sending mixed signals:

• Global tension → should push prices up
• U.S. production → pushing prices down

For now, domestic supply is winning

We’re always available if you ever want us to take a fresh look at your electric or natural gas accounts and supply contracts to better understand how these ever changing energy price trends affect your specific situation.  Please feel free to call or email us if you have any questions or want to talk.

 

RD Energy – Your Local Energy Partner Since 2005