Infinity Insights - Volume 15, Issue 18
MONTHLY UPDATE - SEPTEMBER 2025 EDITION
NATURAL GAS
Spot NYMEX Natural Gas is showing support at $3.05. Spot natural gas peaked mid-June around $4.00. With a relatively mild summer, large production prints, and strong inventory builds spots looks as if a floor has been established at $3.00.
Forward strips balance year 2025 is down 11%, ‘26 down 6%, ‘27 down 3% and ‘28 down 1% versus our prior publication. Forward strips at the front of the curve are down considerably since the beginning of summer ’25. Back of the curve is less impacted.
US natural gas rig count is up 22% year-over-year at 118. Production remains robust at 107 Bcf/day. LNG feedgas remains strong at 16 Bcf/day with expectations of continued growth as more liquification capacity comes online.
Inventories are 6% above the 5-yr average and 1% below last year’s level. Taking all of the above into account, US inventories are expected to reach 4 trillion cubic feet, which is considered full going into winter. EIA’s latest Short-Term Energy Outlook is forecasting natural gas to average $3.70/MMBtu in 4Q25 and $4.30/MMBtu in 2026.
Prompt month natural gas has support at $2.70 with resistance at $4.00.
Balance year 2025 finds support at $3.07 with resistance at $3.98. Calendar year 2026 has support at $3.55 with resistance at $4.56. Calendar year 2027 has support at $3.44 with resistance at $4.82.
Global natural gas prices ($/MMBtu):
Henry Hub (USA): $3.12↑
NBP (UK): $10.83↑
TTF (Dutch) $10.31↓
JKM (Japan/Korea) $11.36↓
Weather
The 6-10 Day Temperature Outlook shows above normal temperatures across the lower 48. The 8-14 Day Temperature Outlook shows some relief in the Pacific Northwest. Current drought conditions remain persistent in the Southwest and have expanded to the mountain region.
Note: temperature anomalies at this time of summer are less impactful than if this was to occur during peak summer.
There is one tropical storm and two disturbances in the Atlantic. Tropical Storm Gabrielle shows a trajectory of heading north, possibly impacting Bermuda where it should dissipate. Disturbances 1 and 2’s forecasts are unclear as it’s too early in their development.
So far this hurricane season has been subdued, especially when considering meteorologists were anticipating an active season. Stay prepared, Atlantic hurricane season ends November 30th.
Look Back Summer 2025
It may not feel like it in most of the country but peak summer is now behind us. Looking back at this summer, PJM, NYISO, and ISO-NE experienced high real-time power prices due to an early summer heatwave. Prices softened considerably in August & September as weather moderated, settling in the $25-$43/MW range. There were marginal increases year-over-year as load growth has increased, and in most cases, new generation has not kept up with demand. NYISO Zone J, New York City saw the largest jump in real-time pricing, a 54% increase year-over-year. ERCOT was the most subdued, with 14% and 19% increases year-over-year for the North and Houston zones, respectively. There were voluntary calls for conservation in New York late-June and early-July with the associated unseasonably hot weather. The DOE and FERC issued emergency orders for the Midwest, calling on generators to maximize generation output to help manage the unseasonably high demand. Overall, an increase over the prior summer, but far more favorable than summer 2022 across the board. No forced outages, but high real-time pricing does impact future contract prices.
Market News
Unemployment ticked up again in August to 4.3%. July CPI came in at .4% on a seasonally adjusted basis and 2.9% over the trailing 12-months. The Fed cut rates by 25 bps 9/17/25, markets are pricing in a 75% chance we will see another 25 bps cut in October. Consumer confidence dipped slightly. Equity markets remain at all-time highs with the S&P 500 up 13%, YTD. The US Dollar continues losing ground to other currencies while gold trades at an all-time high.
Dynamic Line Ratings
Overhead transmission lines, the main arteries of our electric grid, are rated based on their transmission capacity. Transmission lines and transformers, like most electronics, perform worse when heat is present and risk equipment failures. In an effort to ensure safe operation and equipment integrity transmission line ratings are used to restrict the volume of electricity allowed to flow through every transmission line.
The biggest factors for heat gains on transmission lines are heat from electrical resistance, heat from solar radiation, heat dissipation from convection, and heat dissipation by thermal radiation. Taking all of these factors into account a rating is assigned to every transmission line. This formula is known as The Heat Balance Equation. In the past, this formula was constant and assumed the worst conditions. For instance, Southwest Power Pool’s (SPP) 2015 Planning Criteria assumed an ambient temperature of 104°, wind speed of 1.4 mph and 100% sunshine. We know these factors are not static. Using “worst case scenarios” was seen as a safe and conservative way to manage the grid.
Dynamic line rating (DLR) systems use sensors on transmission poles and wires to measure line temperature, ambient temperature, humidity, line sag and tension. Sensors convey this data to system operators which then gets fed into an algorithm and a dynamic line rating for those conditions is produced. These calculations ensure safe operation while maximizing capacity.
In the late 1980’s utilities and researchers theorized that much of the grid’s congestion could be reduced by implementing DLR. Using basic weather stations and conductor temperature sensors in a controlled environment the hypothesis was proven to be highly effective, that transmission lines could operate safely carrying far more power than their static transmission line ratings.
The 2000’s brought major improvements with advancements in sensor and communication technology, data analytics and hardware cost reductions. At this time Europe started rolling out dynamic line rating for high voltage, cross-border transmission lines. The US was slow to adopt the technology because of regulatory issues, implementation costs, and a generally more conservative approach to grid management versus European counterparts. In the late 2000’s DLR grew in acceptance as demand for power increased and dependence on renewables grew. The American Recovery and Reinvestment Act of 2009 created the Department of Energy’s Smart Grid Demonstration Program. Through this program the New York Power Authority and Oncor Electric Delivery Company conducted DLR demonstration projects. The demonstrations’ results were impressive, the findings showed that in favorable conditions transmission could be increased 10-30%. These types of results suggested that capital intensive infrastructure upgrades could be avoided. In 2019 the Department of Energy reported to Congress that the utilization of DLR could help stabilize the grid by reducing congestion, improve reliability and support renewable integration.
June 2024 FERC (Federal Energy Regulatory Commission) issued an Advance Notice of Proposed Rulemaking to encourage the adoption of DLR. Purpose of the initiative is to ensure existing transmission infrastructure is used to its full capacity, reducing costs, improving efficiency while maintaining reliability.
Adoption for DLR in the US has been slow but shows signs of acceleration, particularly in regions with high renewable penetration and congestion. For example, PPL Electric Utilities in Pennsylvania, 230 kV DLR transmission lines increased average capacity by >16%, reduced congestion costs by ~$65 million in a single winter and deferred $50 million in infrastructure costs. Another example, in wind energy heavy west Texas, 5 DLR transmission lines bringing power to the DFW area is estimated to save $1.25 million per day by increasing wind energy integration and reducing congestion.
It's estimated that about 20 US utilities are currently using DLR. We expect to see DLR acceptance grow as demand for power skyrockets across the country and hesitation persists for capital intensive investments. DLR is a proven management system and could be a big part of the ongoing energy transition. .
Supplier Partner Spotlight – Gas South: Built on Relationships, Fueled by Purpose
From a local startup to a regional energy leader, Gas South has spent two decades redefining what it means to be a responsible energy company. Founded in 2006, the Atlanta-based natural gas provider has steadily grown to now serve about 500,000 residential, industrial, governmental and wholesale customers in 16 states throughout the Southern, Mid-Atlantic and Midwest regions.
Offering flexible rate plans, tailored energy solutions and dedicated account representatives who get to know the needs of businesses large and small, Gas South has also earned a reputation as a company that values long-lasting relationships with customers. In their home state of Georgia where they also provide service on the residential level, Gas South’s competitive rates and unparallelled customer care have established them as the state’s highest-rated energy provider—with more than 5,000 Google reviews as a testament to their level of service.
But their drive to be the energy provider of choice doesn’t end with great rates and top-rated service. Gas South is also committed to giving back to the communities they serve, giving back 5% of profits every year to help support children in need. That’s money that goes toward childhood basic needs, education and health. Since their journey began 20 years ago, part of Gas South’s vision to Be A Fuel For Good® has meant these communities have received more than $20 million in total charitable support.
And they’re committed to the future of the planet, too. In 2021, the company began investing tens of millions of dollars each year to support solar and other renewable energy projects. By the end of 2025, this commitment will total almost $100 million—a bold step toward a more sustainable future.
Learn more at GasSouth.com.