North America Energy Market Outlook: What you need to know

A winter in review—and lessons learned

Last winter’s NYMEX natural gas prices averaged $3.91/MMBtu, trading largely within our forecast range until Winter Storm Fern drove a short-lived but severe price spike. The takeaway? Structural volatility is here to stay, and even well-calibrated forecasts must account for extreme weather events.

Geopolitical disruption on an unprecedented scale

The conflict in Iran has created the largest energy supply shock in history, with roughly 20% of global oil and LNG supply affected. QatarEnergy’s Ras Laffan facility—the world’s largest LNG export terminal—has declared force majeure, with years of repair ahead. The ripple effects are being felt across global pricing, supply security, and U.S. LNG export demand, which we expect to be 20–30% higher year-on-year this summer.

Macro headwinds are building

Tariff turmoil, weakening GDP growth, historic lows in consumer sentiment, and a Federal Reserve caught between inflation and a softening labor market are all tempering energy demand expectations. Electricity consumption forecasts for 2026 have been revised lower though historic growth is still expected for a third consecutive year, driven by AI, electrification, and data center expansion.

The power market is transforming

Solar and batteries now account for 80% of new U.S. power capacity, and renewables are beginning to displace gas burn in key markets like ERCOT and California. Meanwhile, FERC is accelerating natural gas infrastructure approvals at a pace not seen in years.

Storage offers a silver lining

Inventories are projected to end summer 2026 at 1% above the five-year average—but flat storage capacity against rising demand means full reserves no longer guarantee price stability.