US Gas-for-Power Demand to Stay Flat This Summer Before Record 2027

US Gas-for-Power Demand to Stay Flat This Summer Before Record 2027 EIA sees Lower-48 output rising 3% this year as gas burn for power holds, even as China's coal grip tests the global gas-demand thesis. US marketed natural gas production in the Lower 48 averaged 117.2 Bcf/d in the first quarter of 2026, a 4% increase on the same period in 2025, the EIA's latest Short-Term Energy Outlook showed on Thursday (2026-05-21). The agency expects output to keep climbing through its forecast horizon.¹ Rising supply into flat summer power demand is what tilts the near-term balance bearish. NYMEX Henry Hub front-month settled at $3.12 by Friday's close (2026-06-13), and the signal read across MISO and ERCOT real-time power points the same way, with bearish weight outrunning bullish by a clear margin. Gas for power generation is set to hold roughly flat this summer before the EIA's projected record in 2027.^1,7 The supply story is concentrated. The EIA expects Lower-48 marketed production to grow 3% over 2025, with most of the gain loaded into the back half of the year.¹ The Permian does most of the work. The agency forecasts the basin at 29.2 Bcf/d in 2026, 6% above 2025, as associated gas rides higher crude output. Takeaway constraints have capped flows, but the EIA expects those to ease later in the year and Permian production to grow 10% in 2027.^1,7 Haynesville, the gas-directed counterweight, is set to grow 6% this year and 8% next, on the EIA's numbers.¹ That pairing matters because it means supply growth does not depend on a single drilling response; associated barrels and dry-gas economics are both pulling in the same direction. The demand case for 2027 leans on a structure already visible in the data. The EIA projects electricity consumed by data-center servers to rise across the commercial building stock through 2050, with standalone facilities outpacing all other server rooms combined.⁶ Power demand is the swing factor for gas burn, and load growth of that kind does not reverse on a warm or cool summer. Weather still sets the near-term tape. Natural gas prices rose on Monday (2026-05-18) as warmer-than-normal forecasts spread across both US coasts, FXEmpire reported.³ The move did not hold. Futures faltered for the first time in the week on Wednesday (2026-05-20) as weather demand eased and supply stayed ample, Natural Gas Intelligence reported.⁴ Infrastructure is inching to meet New England's pull. Enbridge launched an open season in the week of 2026-05-18 to revive a proposed expansion of its Algonquin gas transmission system, aimed at serving demand in the region, Natural Gas Intelligence reported.⁴ It is a reminder that constraints, not resource, define where US gas can actually go. The contrarian read sits on the demand side. One signal flags Henry Hub front-month as bullish with a 0.70 directional score on demand, against a broadly bearish consensus. The case is the 2027 inflection: if data-center load and LNG pull arrive faster than the production ramp, the flat-summer balance flips before the calendar does. China is the wider test of the gas-demand thesis, and the read is cautionary. Thermal generation, mostly coal with a small gas contribution, rose 1.5% in 2024 to 6.34 trillion kWh, official data showed on Friday (2026-05-15), defying expectations of a coal peak.⁵ December thermal output actually fell 2.6% on the year.⁵ The growth is going elsewhere. Chinese hydropower jumped 10.7% in 2024 to 1.27 trillion kWh while overall power demand grew 4.6%, the statistics bureau reported.⁵ Greenpeace analysts said renewables could meet all of China's new demand growth in 2025.⁵ Where gas competes for marginal power load, it is increasingly boxed in by cheaper domestic coal and a fast-building renewable fleet. The longer arc still favors gas globally. The IEA's Electricity 2026 report sees world power demand growing more than 3% a year through the decade, with coal's share eroded by nuclear, renewables and gas, lifting the renewables-and-nuclear share toward 50% by 2030.² Gas grows in that mix, but as one winner among several, not the default marginal fuel. For traders the near-term setup is straightforward and the 2027 call is not. Watch Permian takeaway relief and the Haynesville rig response on the supply side; watch data-center interconnection queues and LNG offtake on demand. The flat-summer balance can hold only as long as production keeps pace with the load it is being built to serve.