Northeast U.S. natural gas price link to Europe primarily a winter concern

If you have been in the business world any length of time, you’ve likely heard the phrase “past performance is not indicative of future results”. 

While this statement is true in many areas of personal life, this is also applicable to the natural gas pricing benchmark for the New York Mercantile Exchange (NYMEX) futures contracts. For many outside commodity markets, or more specifically the natural gas business, a reference to NYMEX futures pricing can often be misinterpreted. 

For many buyers of natural gas, the commodity portion price component can be protected for any month in the future for several years into the future, the price of which is transparently seen and known by both buyers and sellers looking to protect that price into the future and is visible via the NYMEX futures market for natural gas. To be clear, the price available is not a prediction of what the price will be at any point in the future, but the price at which a transaction could occur at that moment in time. This snapshot of pricing for a future period can be transacted upon, effectively fixing or hedging a major component of a buyer’s gas cost. Absent locking in that component, the market continues to move up or down every day based on multiple variables that move natural gas prices. The price of natural gas that was shown yesterday is no longer available and the price the NYMEX will show tomorrow is still unknown. The only price that a buyer can lock down is the snapshot NYMEX price at this point in time today. 

It is true that past performance is not indicative of future results, but we need to be careful not to completely ignore history, as it does provide insight as to what it has actually done and some fundamental reasons of why it may happen again. The chart  below is a combination of recent NYMEX Last Day Settlement prices for January-August 2026, and the snapshot of what a buyer could purchase natural gas for each month into the future as of July 30, 2026. Each month on the chart has a gray column, which represents the range of trading for that month on the NYMEX over the past 2 years, or what the range of price that a buyer may have bought it for over that time. 

For the period of Jan-Aug 2026, the blue bar within each gray column represents the final settlement price of NYMEX when each month ceased to be a future month and the price which a buyer paid that month that chose not to hedge. 

From September 2026-December 2028, the blue bar represents the NYMEX monthly price for a specific moment in time, on July 30, 2026.

There have been multiple reasons why natural gas prices in the U.S. have fluctuated in the past. Back in 2020, COVID demand destruction caused NYMEX Settlements to average just $2.07/MMBtu. Just two years later in 2022, Russia’s invasion of Ukraine pushed the same calendar year settlement to more than triple at $6.64/MMBtu. In late January this year, Winter Storm Fern shot the February 2026 NYMEX settlement to $7.46/MMBtu, (red circle on chart) the absolute highest price for the February 2026 NYMEX contract at any point in history. None of these examples could have been predicted to occur nor their price impact. Again, NYMEX natural gas futures aren’t a prediction of what prices will be, but rather the collective market’s provision of opportunity of what you could buy that future period for today. 

Given the reminder of what happened in recent history, let’s take a pragmatic approach to the current NYMEX opportunity today. For every month to the right of the Settled History in the chart above, we can see that the current NYMEX price available in the market today (blue bar) is at the lower end of pricing for each month within the September 2026-Decmber 2027 time frame (green rectangle). While the remainder of 2026 is near the lowest price in two years currently, Calendar year 2027 is also presenting an attractive price relative to history and currently sitting at the 9th percentile of price range over that period of time. In other words, over the last two years, the price for Cal 2027 has been higher than today 91% of the time and currently trading at an average price of $3.36/MMBtu. 

Take time to evaluate the risk in your current gas purchase strategy. Should you decide to protect at some level, the time to do so is during periods of low prices, not high, and the upside risk today is currently greater than the remaining downside opportunity for some level of protection for conservative to moderate level risk buyers.