Last week, we discussed in a NG South Central Flash how intermittent cold snaps from late November through December kept South Central heating demand relevant, but we sustained warmer conditions during the first half of January 2026. While HDDs briefly ran above normal during short-lived cold shots, the broader pattern remained mild, limiting the durability of weather-driven demand support. As a result, early-January fundamentals never fully shown the typical winter demand regime.

Figure 1 | | South Central 7-Day Moving Average, Power and Natural Gas Components

So far this January, that softness has been clearly visible across power and gas indicators. Regional load, net load, and gas-fired power burns have all tracked well below last year’s levels, reflecting warmer conditions and strong renewable generation offsets. LNG feedgas demand, however, has remained a key stabilizing force, holding near recent highs and continuing to anchor South Central balances even as domestic weather-driven demand lagged.

On the supply side, production has remained steady and ample, both nationally and within the South Central, reinforcing a comfortable near-term balance. At the same time, coal generation played a meaningful role in displacing gas during December, suppressing gas’s share of the thermal stack. That dynamic has begun to shift in January, with gas capturing a larger share of dispatch on lower thermal days, offering some structural support to power burns even as overall demand remains muted.

Figure 2 | Daily South Central Power and NG Profile

Looking ahead, conditions are set to change over the coming days, with the latest weather forecast pointing to cooler temperatures (from Jan 24 onward) and firmer demand relative to early January. While this will increase HDDs and power burns from recent lows, typical winter tightness has yet to materialize. As always, we continue to provide timely, data-driven insights on evolving natural gas and power fundamentals. To remain abreast of the South Central market fundamentals and other markets, you can reach us out at [email protected] or explore our offerings to learn more about our market intelligence packages.

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