Posted: January 23, 2026, 1:23 pm

Cold Weather Alert…

Normally we use the WPO to pull out some interesting topics we deem worth the read or discussion from the past week or two. This week, with snow and ice Armageddon upon us, we will use our real estate and the readers attention to concentrate on weather and gas commentary below. There is no need for us to try and replace anyone’s favorite weather person, ours is Ryan Hall Y’all, so we will defer to those experts.

As it pertains to us in the electric world, we will let the ISO early alert and warnings tell the story. We haven’t seen it yet, but we would expect the ISOs to start capacity initiatives for generation assets and demand response. We often talk about capacity on these pages, and times like these are where generators earn those dollars….their ability to be up and ready to accommodate load and ancillary needs is why they get the big bucks. Stay warm and dry everyone and hopefully we aren’t talking about massive power outages caused by ice storms next week.

Natural Gas Market Commentary

provided by

Last Friday, in this space, we discussed the difference between “NYMEX Cold” and “Gas Daily Cold.” That feels like a lifetime ago. At the time, forecasts for the second half of January didn’t look particularly impactful, and the futures market was largely ignoring the risk. NYMEX futures were trading at multi-year lows.

What a difference a week makes.

Smash cut to today: we are at the beginning of what is forecast to be one of the coldest 10-day stretches since the 1980s, storage inventories may be on the verge of a record three-week drawdown, and February gas is up more than $2 on the week, trading Friday morning well above $5.00 per MMBtu. The market is in full panic mode, and we are running out of superlatives to describe the price action. With forecasts showing cold extending into next month—and no clear end in sight to below-normal temperatures across the Midwest and East—the market is aggressively repricing February risk.

We noted last week that “NYMEX Cold” has a material impact on seasonal storage inventories. Well, here we are. A week ago, our models showed stocks bottoming out around 2.1 Tcf—near the top of the five-year range. With updated weather data, inventories could now fall south of 1.7 Tcf, below both the five-year average and the 2025 seasonal low. In other words, instead of exiting winter with a comfortable surplus, the market is now bracing for a spring deficit. Unsurprisingly, gains have also spread further out the curve. The April–October 2026 strip is back testing $3.80 per MMBtu after trading as low as $3.03 just last week. While less dramatic than the front-month move, this represents a meaningful shift in expectations for the upcoming summer, effectively erasing the steep losses posted earlier this month.

As interesting as summer NYMEX price action may be, it is secondary to the situation at hand. With production estimates already showing signs of weather-related shut-ins and demand poised to spike toward record levels in the coming days, end users with exposure to spot pricing should brace for extreme volatility. Key hubs across the Midwest, East, and South Central regions are all but certain to see double-digit natural gas prices this weekend and beyond. In more constrained markets, indicative pricing for the balance of January is in the $30–$60 per MMBtu range. If production disruptions spread further south or persist longer than expected, conditions could deteriorate quickly.

Buckle up. It is going to be an interesting couple of weeks.