As we leave October and head into November, we’re seeing both rallies and pullbacks in wholesale natural gas and PJM power

prices. That’s because short-term fundamentals—like weather, storage, and daily LNG flows—can shift quickly, while medium- and long-term trends are becoming increasingly forecasted demand driven. We believe understanding the short-term and long-term drivers of power and natural gas prices really helps us at RD Energy advise and coach clients in making more informed, smarter and prudent buying decisions.

Short-Term Drivers (next 1–3 months)

•  Mild fall keeps gas balanced. Storage levels near 3.8 Bcf remain strong heading into winter, limiting early price spikes unless December turns sharply colder.

• Record natural gas daily production meets an always adjusting daily variable demand. Daily natural gas production remains near 108 Bcf/day, but even a 5- to 10-day cold snap could easily swing well-head prices 30–50¢ as storage withdrawals accelerate.
• Weather volatility ahead. La Niña typically brings a colder pattern to the Midwest and Northeast—watch for whipsaw prices higher and lower and whipsaw temperatures higher and lower.
• Daily LNG feed gas fluctuations. As LNG export capacity grows any pipeline maintenance or short-term outages at Gulf Coast export terminals can mildly and dramatically shift domestic total daily demand and greatly influence drive day-to-day natural gas NYMEX moves higher and lower.
• PJM near-term power prices swings in close parallel with short-term natural gas prices. Natural gas prices often sets the power price trend for much of PJM; any cold spell or supply constraint can lift both day-ahead and forward natural gas and power prices.

Medium-Term Drivers (6–24 months)

•  Stronger LNG export growth tightens domestic supply and demand in favor of demand. New facilities is bringing total U.S. LNG demand toward 22+ Bcf/day in 2026—creating a higher floor for domestic prices.

• Limited natural gas drilling response to growing natural gas demand. Producers remain disciplined; rig counts are at healthy levels, but U.S. natural gas producers are being strategic in trying grow production slowly while keeping well-head prices elevated.  The U.S. EIA is forecasting that natural gas demand will outpace natural gas production in 2026 pushing up natural gas prices through much of 2026.
• AI & electrification is driving power demand. PJM projects multi-gigawatt increases in peak demand from data centers, EV infrastructure, and industrial electrification.
• PJM Capacity prices went up 833% June 1 2025.  These costs will rise  another 22% starting June 2026.  It should be known by late December what the PJM capacity cost will be starting June 2027.  Many consumers do not yet understand that higher electric prices are driven by both wholesale power prices and much higher PJM capacity price that together make up approximately 90% of the supplier price offers.

Long-Term Drivers (3–10 years)

•  AI and digital infrastructure reshape power demand. PJM’s interconnection queue shows dozens of data-center projects across Ohio, Virginia, and Pennsylvania—sustaining double-digit growth in electricity use.  Two big questions will need to be answered; 1. How much of this power queue is phantom , meaning, is some of the same projects being bid and held in queue behind multiple utilities as developers look for the quickest path to getting built.  2. How quickly or how long will it take to get power demand and supply in much closer balance that would help lower PJM capacity prices.

• U.S.  natural gas goes global in a big way. As U.S. LNG capacity doubles by 2030, U.S. prices will increasingly track global markets; volatility will be greater, and “cheap gas forever” will be gone.  Maybe.  There are growing fears that the U.S. is growing LNG export capacity to the level of over doing it.  “Over doing it” is another phrase for creating a surplus and trying to flood the globe with natural gas beyond demand resulting in lower well head prices.
• Generation mix transition. Renewable projects and battery storage continue to scale,  but new transmission infrastructure and backup generation must catch up to growing demand to offset retiring coal and nuclear units. Until then, capacity costs will stay structurally high.  However, we’re now seeing the increased likelihood that some delay in power plant retirements and we’re seeing more AI data Center developers like Amazon, Meta, Microsoft and Google finding or building their own power generation at some of their sites.

RD Energy Takeaways

•  We  continue to work hard at being strategic: Track and use wholesale natural gas and power market dips to renew or extend supply contracts or at least layer in hedges. History still shows that shoulder-season softness can provide cost-saving entry points.  Plus, we always look for unexpected market dips throughout the year.

• Plan for tighter natural gas and power supply/demand fundamentals in 2026–2028. Rising LNG exports and PJM capacity costs make multi-term procurement more  opportunistic if done strategically.
• Leverage Peak Load Management. With capacity at $329/MW-day next year and quite possibly $325/MW -day the year after, every kilowatt shaved during PJM summer peaks saves real money.
• Stay informed. RD Energy continuously monitors wholesale energy trends to help our clients buy smarter, more timely and more strategically to lower the impact of higher energy supply costs and higher PJM capacity costs.

Demand Response.  With PJM       capacity at $320/MW-day next year we are renewing and signing up new       clients now through February 2026 into next year’s June 2026 – May 2027       Demand Response year.  Demand Response provides income to the       customer who is able to reduce power consumption for a number of hours       when PJM experiences a critical high usage event on the grid and a black       out is on the near horizon.  Participants in Demand Response receive       income for participating in Demand Response and meeting load reduction       obligations.  Anyone interested should please contact us to find out       more about it while the window for next year’s program year is open.        There is limited space in the program and no one is doping out of the       program so if there is a real interest in learning about the program, we       suggest learning more sooner than later, since it could fill up.