Energy Market Update: August 2025

July temps were generally near average, save for a few hotter days that pushed prices higher. Peak Day Ahead prices came in above $500 for several on peak hours near the end of the month as temperatures rose above 90F. The 12-month electricity price at the start of the month was $47.45/MWh in Ohio and finished the month at $47.01/MWh. In PA, it increased slightly from $51.15/MWh to $51.21. There was more movement in the longer terms. The 36-month strip in OH fell $0.47 to end the month at $47.68. PA was similar with a decrease of $0.38 to end at $52.28. We’re now into the higher capacity rates (started 6/1/2025).  For many customers this will make up a substantial portion of their all-in price and is not going to decrease for at least the next 22 months.

We continue to see market fundamentals that are worrisome for energy buyers:

• The number of US gas drilling rigs is about 15% lower than this time last year.  
• Natural Gas storage injection levels are now 173 Bcf above the 5-year average but 127 Bcf below last year.  
• PJM’s Capacity Auction for rates effective 6/1/2026 – 5/31/2027 came in at the FERC imposed cap in all zones with a price of $329.17/MW-Day.  
• The next capacity auction will take place in December. Given the short period between auctions, it’s likely that capacity rates for 6/1/2027 – 5/31/2026 will also hit the FERC cap price.

The wholesale energy markets watch these factors, and changes can push prices up or down on a daily basis. Based on where we stand now, we recommend evaluating these strategies:

Action Advice

Your to-do list for August and the rest of summer:

• As you budget for 2025 and beyond, keep in mind it is unlikely for prices to materially decrease in the next few years. 
• Monitor the broader economic conditions as these can influence energy prices.

Want to help your business navigate the current market? Get started with your Shipley Energy Advisor today!

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Natural Gas Market Update

• August 2025 NYMEX expired at $3.081/MMBtu.
• Natural gas storage is currently 196 Bcf over the 5-year average, and 79 Bcf behind last year’s level. We are on pace to achieve a healthy level of storage by the winter – roughly 3.9 Tcf.
• Momentum in the natural gas NYMEX market has been on a downward trend since mid-July. Overall market volatility has also decreased from 81% volatility to 69%. This decline is related to some moderate weather patterns and increased market stability with storage injections returning to levels closer to the 5-year average. 
• Based on data from S&P Global Commodity Insights, overall natural gas usage in the United States dropped by 2.1% (equivalent to 1.6 billion cubic feet per day) compared to the prior week ending on July 25th.
• The power generation sector saw a notable decline of 3.8% (1.7 Bcf/d), likely due to cooler temperatures across the western and northern regions of the country. Meanwhile, industrial consumption edged up by 0.7% (0.2 Bcf/d), while residential and commercial use dipped slightly by 0.9% (0.1 Bcf/d).

Factors impacting the natural gas markets currently

• Weather trends and NG pricing versus coal will determine the pace of storage injections through the end of October.
• A storm in the gulf could prohibit LNG exports which would result in more gas being available domestically.

Action Advice

With the recent downturn in the NYMEX market over the last month, we recommend reviewing renewal price options with your Account Manager for the Sep 25-Oct 26 term in particular.

Other rate options include Basis Only or NYMEX Lock deals to separate the two elements of your natural gas supply price to look for potential value vs standard Fixed pricing. For those who want to float their NYMEX, consider a cap and floor structure to economically manage your risk. Ask your Account Manager for details. 

August 2025 Natural Gas NYMEX Settlement Price: $3.081/MMBtu

Last month: July 2025 Natural Gas NYMEX Settlement Price: $3.261/MMBtu

Last year: August 2024 Natural Gas NYMEX Settlement Price: $1.907/MMBtu

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