Infinity Insights - Volume 15, Issue 15

MONTHLY UPDATE - JUNE 2025 EDITION

NATURAL GAS

NYMEX Natural Gas is trading around the $3.75 mark. Spot natural gas has firmed slightly since our last publication.

LNG liquification sites continue spring maintenance. Daily LNG feedgas is right around volumes seen this time last year, 13.3 Bcf per day. Venture Global’s Plaquemines LNG, the most recent addition to the US LNG export fleet is operating at 95% of capacity. We expect to see LNG exports pickup as we enter summer, marking the end of maintenance season.

Natural gas power burn is right where we would expect to see it for this time of year, around 31 Bcf/day. Power burn was down significantly in March and April, around 27 Bcf/day due to mild weather. The recent increase in power burn is expected as temperatures rise and demand for cooling increases.

Natural gas inventories continue to gain on the deficit to last year. Current inventories sit at 5% above the 5-yr average and 10% below last year’s mark.

Note: 2025 inventory deficit to 2024 peaked in March at a staggering 27%.

Spot month natural gas has support at $2.90 with resistance at $3.90.

Calendar year 2025 finds support at $3.24 with resistance at $4.78. Calendar year 2026 has support at $3.98 with resistance at $5.06. Calendar year 2027 has support at $3.48 with resistance at $5.08.

Global natural gas prices ($/MMBtu):

Henry Hub (USA): $3.71↑

NBP (UK): $11.32↑

TTF (Dutch) $11.37↑

JKM (Japan/Korea) $12.37↑

Most of Europe, with the exception of northern Europe, are bracing for hotter than normal temperatures this summer. A heatwave over the Mediterranean region is expected this month with temperatures anomalies around 2-4°F.

South and Southeast Asia are expecting close to normal temperatures, while the Arabian Peninsula, Central and East Asia are expecting temperature anomalies of 2-4°F.

On a population weighted basis, both Europe and Asia are expected to have warmer than normal summers. This will result in increased natural gas and power consumption as cooling demand increases.

Weather

NOAA’s forecasts are showing above normal temperatures in the 6-8 Day and 8-14 Day, as well as the seasonal forecast for summer. Meteorologists are expecting a slightly warmer than normal summer. This could mean record summer demand for CAISO and ERCOT as these ISO’s have experienced significant load growth in recent years.

There is a disturbance in the eastern Pacific with a high likelihood of cyclone formation. The system will likely steer further northwest and dissipate before posing a threat to any land masses. The western Atlantic is clear at this time with ocean heat content in the Main Development Region slightly above the 10-yr average and well below 2023 and 2024 levels.

A strong Saharan Air Layer or Saharan dust system is making its way over the Atlantic, travelling west towards the southeast continental US. The Saharan Air Layer is associated with poor air quality and visibility as well as cooling ocean temperatures. The Saharan Air Layer is a naturally occurring annual phenomenon but this system is noted as being particularly large vs. prior years.

US DOE Halts Retirement of Gas & Oil-Fired PJM Plants

The US Department of Energy (DOE) declared an emergency in some of the PJM market as the ISO continues to experience tightening supply and demand conditions. Utilizing the Federal Power Act, the DOE secretary is authorized to order power plants to continue operations during wars and emergencies. The emergency declaration was made May 30, just one day prior to the planned retirement of the Eddystone Generating Station just south of Philadelphia. The Eddystone Generating Station started operation in 1960, has a capacity of 820 MW, able to run on natural gas and oil. The DOE released a statement “the potential shortage of electric energy, shortage of facilities for the generation of electric energy, and other causes in the region support the need for the Eddystone Units to contribute to system reliability”.

The order comes after a May 23 mandate that the JH Campbell Generating Plant remain online too, a coal-fired generating facility located in West Olive, Michigan with 1,420 MW capacity. JH Campbell Generating Plant was to be decommissioned on May 31st but under the mandate the plant is to remain operational until at least late August.

The mandates did not come without criticism. The Natural Resources Defense Council Managing Director, Kit Kennedy said “these dirty and expensive fossil plants were slated to close because they could not compete with cheaper, cleaner alternatives.”, Kennedy went on to say “the Department of Energy’s move to keep these zombie plants online will have significant public health impacts and increase electricity costs for the people in Michigan and Pennsylvania”.

As highlighted in the graph below, PJM has lagged other ISO’s in the renewable transition, especially in wind and solar. PJM generation and demand has not increased materially over recent years and has eroded coal market share similarly to ERCOT. The most glaring issue here remains PJM’s slow deployment of new renewable generation. Unless PJM increases their adoption of additional generation sources such as coal, gas, nuclear or renewables, we believe the tightening of supply and demand will continue.

Texas Legislative Session

Texas’ 89th legislature ended Monday, 6/2.

Senate Bill 388, a bill aimed at requiring 50% of new power generation come from natural gas and would impose penalties for non-compliance passed a Senate vote but ultimately died with the expiration of the legislature session. The bill would have hampered deployment of new wind and solar generation.

Senate Bill 715, a bill drafted that would require wind and solar generators pay a “firming” fee due to the intermittent nature of renewables passed a Senate committee vote by a slim margin but ultimately died. SB 715 was another bill with the intent of slowing deployment of renewable generation.

House Bill 3356, a “twin bill” to SB 715, similarly, required “firming” fees for renewables. Renewable energy advocates strongly opposed the bill and it has since died.

Senate Bill 819, another bill targeting renewable deployment, was intended to create a new permitting program specifically for wind and solar generating facilities. The bill would have increased permitting costs and time for new renewable project approvals. The bill was passed by the Senate Business and Commerce Committee but ultimately died.

Texas Energy Fund (TEF) was fully funded with an additional $5 billion. $1.8 billion is earmarked for the Texas Backup Power Package Program (TBPPP). The TBPPP will help finance hybrid generating facilities. These facilities include gas-solar-storage systems. Unlike the Senate and House bills above, TBPPP encourages diversity in generation, utilizing natural gas, solar and BESS (battery energy storage systems). A diversified generation fleet helps mitigate risks of service interruptions while providing low-cost generation through solar and BESS.

The majority of the remaining funds in TEF are earmarked for low interest loans for the development of new natural gas facilities. Worth noting, 8 applicants for the low interest loans have already withdrawn their applications citing financial viability concerns with the recent increase cost of natural gas, and uncertainty for development with lingering tariff negotiations.

Texas Advanced Nuclear Fund

House Bill 14 established a nuclear fund aimed to incentivize nuclear plant development and innovation. Stakeholders were hoping for $2 billion in funding but the final budget came in at $350 million. The bill creates a central office for nuclear development and is largely seen as a step in the right direction as far as nuclear generation in Texas goes. Again, this points to further diversification in the ERCOT generation fleet. Texas nuclear has plateaued in growth at about 40,000 GWh of generation per year, while market share has eroded accounting for less than 10% of total generation.

In summary, the 89th Texas legislature was a success from a power perspective. There were well supported bills that could have hamstrung ERCOT’s renewables and slowed down expansion of the growing grid, of which none were ratified. In addition, the legislature established the Texas Advanced Nuclear Fund, facilitating the development and innovation of nuclear power generation in Texas.

Market News

US trade balance shrunk drastically in April to -$61 billion, about half the balance of March. April CPI came in surprisingly subdued at .2% or 2.3% annualized. Unemployment ticked up slightly in April to a still manageable 4.2%. US equities are down 3% versus February 2025 highs and essentially flat YTD.

Client Spotlight – NewQuest

NewQuest, founded in 2001, is a privately owned, full-service commercial real estate firm specializing in development, land brokerage, leasing, tenant representation, investment sales, and property management services. Headquartered in Houston, NewQuest owns a portfolio of more than 100 retail and mixed-use projects valued at over $2.3 billion. The firm provides leasing services for more than 12 million square feet of commercial space across Texas, Louisiana, Arizona, Georgia, and other areas throughout the United States. NewQuest has been recognized multiple times as one of the Houston Business Journal’s Best Places to Work.

NewQuest incorporates its Core Values—Accountability, Integrity, Stewardship, Speed, Grit, and Family—into every project and decision. With a proven and trusted process, their team is committed to delivering excellence in every aspect of their work.

A community-first mindset is central to NewQuest’s mission. The company is passionate about building better communities through exceptional property development and management. Each year, the team participates in a community service day. Last year, they joined a large-scale planting initiative in celebration of Earth Day. In partnership with the Houston Wilderness Project, they helped plant 1,500 plants to create a bioswale—an eco-friendly system designed to help prevent flooding in the area.

NewQuest also hosts an annual drive in support of Kid’s Harbor, collecting toys, clothing, and other essentials for children in need within their surrounding communities. Additionally, the team actively participates in efforts with the Houston Food Bank and a variety of other charitable initiatives throughout the year.

NewQuest’s commercial real estate projects are more than just places to live, work, or shop—they are vibrant hubs that bring people together and create a lasting, positive impact on the local community. The company takes great pride in maintaining its properties to the highest standards.

In every development, NewQuest prioritizes thoughtful planning with a focus on community benefit. Most recently, they partnered with the Metro Transit Authority, Fort Bend County, and the City of Missouri City to develop a new Metro Transit Center at Fort Bend Town Center, aimed at enhancing local transportation and amenities for area residents.

For more information about NewQuest visit https://www.newquest.com/.