Lock Gas for Winter 2026-27?

Whether a commercial buyer should lock natural gas for winter 2026-27 depends on four checkable facts, not on a price forecast: where the forward curve sits relative to the last three winters, how much gas is in storage going into November, how much new LNG export demand is pulling on the market, and how exposed the buyer's delivery point is to winter basis. For a facility in New England or New York with heating load, the answer is almost always to fix at least the winter basis now. For a flat industrial load in Ohio or Texas, it is usually to layer in rather than lock everything at once.

Nobody at Inertia Resources can tell you what Henry Hub will settle at in January. Nobody else can either, and the buyers who were promised otherwise in past winters paid for the lesson. What we can do is walk through the decision the way we walk through it with clients each October, and show which parts of it are facts and which parts are judgment.

Check one: where the winter strip sits

Pull the NYMEX futures for November 2026 through March 2027 and average them. That is the winter strip. Then compare it with what the same months cost in the previous three winters when they were trading forward at this point in the year. The question is not whether the number is high or low in the abstract; it is whether you would be locking at the upper or lower end of the range the market has offered recently.

The curve for a given winter typically rises as that winter approaches, because the risk premium grows as the weather gets closer and the chance of a mild outcome narrows. That is why a decision made in October usually beats the same decision made in December, regardless of where prices end up. Our note on when to lock in energy rates covers the timing logic in more detail.

Check two: storage

The U.S. Energy Information Administration publishes working gas in storage every Thursday. The number that matters in October is where inventories sit relative to the five-year average heading into withdrawal season. Storage well above average cushions a cold winter and tends to cap the spike; storage below average means a cold December gets priced into January very quickly. This is a public number and it should be in every October procurement memo.

Check three: LNG export demand

The structural change in the U.S. gas market over 2025 and 2026 is export capacity. Plaquemines LNG in Louisiana, Corpus Christi Stage 3 in Texas and Golden Pass on the Texas-Louisiana border have been ramping toward full output, and each one pulls a large, steady volume of gas out of the domestic market regardless of the weather. That lifts the floor under Henry Hub relative to the years when export capacity was flat, and it makes the market more sensitive to a cold winter, because there is less slack to absorb it.

What this does not do is tell you the price. It tells you the shape of the risk: a higher baseline and a fatter tail. For a buyer deciding how much of a winter to fix, a fatter tail argues for fixing more of it.

Check four: your basis exposure

This is the one that changes the answer by region, and the one most buyers skip. The national price is half of your delivered cost. The other half is basis, the location premium between Henry Hub and your utility's city gate, and in winter it behaves very differently from place to place:

• New England and downstate New York. Pipeline-constrained. Winter basis at Algonquin and Transco Zone 6 has, in past cold snaps, exceeded the commodity price itself. A buyer here who leaves basis floating is unhedged on the most volatile component of the bill.
• New Jersey, Maryland, Delaware, the District. Moderate winter premiums, occasionally sharp. Fixing basis is usually cheap relative to the exposure.
• Pennsylvania, Ohio, Michigan, Illinois. Close to production or well supplied by pipeline. Basis is small and in western Pennsylvania and eastern Ohio often negative. Paying a supplier to fix it can cost more than it is worth.
• Texas. Producing state with abundant pipeline. Basis is rarely the problem; weather-driven power demand in a freeze is, which is an electricity question more than a gas one.

What to do with the four answers

Putting the checks together produces three sensible positions. Which one fits depends on the facility.

Fix the whole winter now

For heating-dominated load in a constrained region, and for any buyer whose budget is already set, lock NYMEX and basis for November through March as a single fixed price. The cost of being wrong in the mild direction is a few percent. The cost of being wrong in the cold direction, unhedged, can be the entire year's savings and more. This is the position we recommend for most hospitals, schools, multifamily portfolios and food plants in the Northeast.

Lock basis, layer the commodity

For a buyer who can tolerate some commodity movement but not a location blowout, fix winter basis now and buy NYMEX in two or three tranches between now and December, so the final commodity price is an average rather than a single bet. This is the standard block-and-index approach applied to gas, and it suits larger loads with an energy manager who will act on the second and third tranche.

Stay mostly floating

For flat, year-round industrial load in a producing region where basis is negative and the facility can pass fuel costs through to its own customers, a largely index-priced contract with a cap, or a small fixed block, is defensible. The buyer is accepting commodity risk because the location risk is small and the premium to remove it is not worth paying.

The mistakes to avoid

• Waiting for the bottom. It is visible only afterward. A decision rule beats a prediction.
• Fixing NYMEX and forgetting basis. In the Northeast this protects the stable half of the price and leaves the volatile half open.
• Comparing quotes with different structures. A NYMEX-plus-floating-basis quote will look cheaper than an all-in fixed quote. It is a different product, not a better price.
• Letting the current contract run out first. A holdover rate in January is the worst gas price in the market. Our guide to holdover rates explains why.

If your gas contract covers this winter already, the question is next winter, and the same four checks apply a year earlier. If it does not, the window to make an unhurried decision is October. We run the checks above for every gas client in the first two weeks of the month and put the answer, with the forward prices on the day, in a one-page memo. The work is paid for by the supplier that wins the bid, not by the client.