It’s already that time of the year: we are preparing for the 2025-2026 winter season! Vicinity Energy is evaluating weather patterns and trends in the natural gas market to inform our customers of potential price volatility.
Vicinity carefully considers and implements risk mitigation strategies to ensure both reliability of supply and the lowest possible commodity deployment to limit exposure to volatile energy markets.
As fuel prices fluctuate, district energy customers rely on Vicinity’s multiple fuel sources to ensure reliable energy delivery and redundancy. Last winter, natural gas spot prices spiked as extreme cold weather drove heating demand sharply higher, compounded by low storage levels and other supply constraints. Vicinity was able to leverage backup distillate fuel supplies to maintain reliability during gas curtailment and price increase.
Natural gas prices forecast by the numbers
Looking ahead to this winter, market expectations for natural gas prices will be shaped by several key factors: LNG exports, domestic production, gas inventory levels, and La Niña weather patterns.
Henry Hub natural gas price forecast
According to the U.S. Energy Information Administration (EIA), the Henry Hub natural gas spot price is projected to average $3.40/MMBtu in 2025, rising to $3.90 MMBtu in 2026. This increase is largely driven by growing liquefied natural gas (LNG) export demand, as several new export terminals in the US Gulf Coast are expected to come online. U.S. LNG export capacity is forecast to expand from the current 17 Bcf/d to nearly 20 Bcf/d in 2026, and close to 22 Bcf/d in 2027.
As of October 3rd, 2025, the November NYMEX Henry Hub natural gas futures contract settled at $3.32/MMBtu, and current forward markets indicate that the Henry Hub price will average about $3.71/MMBtu in November 2025 through December of 2026.
Natural gas price forecast: winter 2025-2026
The prompt winter November 25 – March 2026 strip is currently hovering about $3.95/MMBTU.
Natural gas storage levels are a critical indicator of natural gas prices, and last year’s trends highlight the market’s sensitivity to supply constraints and demand increase.
A resilient production run rate of 107 Bcf/d, together with an early tapering of summer demand and prolonged seasonal LNG maintenance, enabled storage levels to recover to historical norms. As a result, U.S. natural gas inventories are expected to enter this winter at 3.9 Tcf, about 6% above the five-year average, signaling a healthy supply outlook.
The National Weather Service’s Climate Prediction Center is projecting a La Niña pattern heading into Winter 2025–26. Historically, La Niña winters have produced colder conditions across the North and West, and warmer, wetter conditions across much of the East. This setup increases the potential for mid-winter nor’easters and price volatility, echoing past La Niña events such as the 2014 Polar Vortex, Winter Storm Uri (Feb 2021), and the February 2025 cold blast that impacted much of the Northeast.
How can Vicinity help?
Vicinity’s team of experts is continuously taking action to mitigate potential price spikes for our customers, especially during periods of high usage.
In addition to continuously monitoring the markets and leveraging our considerable backup distillate fuel supplies, Vicinity has proactively procured a portion of our fuel supply ahead of the winter season to help ensure efficiency and reliability. Our market experts believe this approach will serve our customers’ best interests and achieve more bill stability and budget visibility.
What can customers do to keep costs down during the winter?
- Take steps to minimize energy use
- Lower thermostat settings to at least 65 degrees when buildings are occupied
- Lower thermostat settings an additional 5 to 10 degrees when buildings are vacant
- Lower temperature settings on water heaters and limit the use of hot water when possible
- Open blinds and shades to take advantage of the sun’s natural heat during the day and close shades at night to reduce heat loss through windows
- Shut down any non-essential equipment
- Temporarily close buildings and encourage employees to work from home so you can keep building temperatures lower throughout the day
Utilize winter preparedness resources: View our winter preparedness checklist to ensure optimal system performance during extreme weather.
Inspections and trap maintenance/insulation: request inspections by Vicinity team to ensure your equipment is optimized for efficient energy use.
Electrification progress
Throughout 2025, Vicinity has remained committed to transitioning our district energy systems away from fossil fuels and has made significant progress electrifying our operations.
In June, Vicinity officially kicked off its Grand Rapids electrification plans by commencing the installation of our newest electric boiler. When the electric boiler enters service in 2026, over 120 of Vicinity’s customers in Grand Rapids will have access to eSteamTM, carbon-free thermal energy, instantly.
In the coming years, we will continue to transform our facilities across the country by electrifying our operations with innovative technologies such as industrial-scale electric boilers, heat pumps, and thermal storage systems.
For questions on how Vicinity can support your businesses’ sustainability goals, reach out to our team.
The information in this blog post is for informational purposes only and is based on sources believed to be reliable. However, Vicinity does not represent or warrant as to its accuracy or completeness. This content does not constitute financial, investment, or trading advice. Any decisions based on this information are made at your own risk. Vicinity is not responsible for any errors, omissions, or reliance on this material.
