Henry Hub Stalls Below $3 as Permian and Haynesville Output Growth Weighs on Prices
NYMEX Henry Hub front-month holds near $2.93/MMBtu after an August short-covering rally, with EIA forecasting sustained Permian and Haynesville output gains through 2027.
NYMEX Henry Hub front-month was flat at $2.93 per million British thermal units on Friday (2026-09-04), trading above a weather-driven short-covering high from August 10 (2026-08-10) without any corresponding tightening in the supply position. That August session was the sharpest in months: September-delivery futures rose as much as 5.2% to $2.801 per million British thermal units, the largest single-day gain since May 28 (2026-05-28), after weather models swung sharply toward hotter outlooks and triggered mass position unwinding among money managers carrying the most bearish gas exposure since 2020.6,7
The unwind lifted prices. It did not change the production outlook.1
EIA's May 2026 (2026-05-21) Short-Term Energy Outlook placed marketed natural gas production in the Lower 48 at 117.2 Bcf/d for the first quarter of 2026, a 4% increase from the same period in 2025. The agency projected full-year L48 output to rise 3% in 2026 versus 2025, with most of the volume gains landing in the second half.1
Two basins are doing most of the work. The Permian was projected to produce 29.2 Bcf/d in 2026, up 6% from 2025, with a further 10% expansion expected in 2027 as pipeline constraints ease. The Haynesville, a dry-gas play, was forecast to grow 6% this year and 8% the year after. Both are on rising curves into 2027, adding a persistent volume increment to a market where storage injections have been running above seasonal norms.1
EIA storage data cited in mid-2026 showed a weekly injection of 80 Bcf, well above analyst expectations and the five-year seasonal average, pushing total working gas in storage to 3,785 Bcf and pressing sentiment lower. Each above-consensus injection expands the inventory cushion that constrains how far front-month prices can recover.2
US LNG export capacity stands near 14 Bcf/d, around 15% of total domestic gas production, providing a significant offshore demand outlet for Lower 48 volumes, according to a May 2026 analysis. Asian LNG spot prices on the JKM benchmark reached $23.76 per million British thermal units on Friday (2026-09-04), normally enough to support competitive US export economics. But China's imposition of retaliatory tariffs on US LNG in early February 2025 (2025-02-04) complicated cargo routing, pushing exporters toward alternative buyers in Asia and Europe and adding freight and contract friction that reduces effective export margins.4,3
Positioning extremes do, occasionally, snap back hard. In spring 2024, when the US gas market was deeply oversupplied, a 288,000-contract short-covering event lifted futures by nearly $1 per million British thermal units. The August 10 (2026-08-10) move carried similarities. But the supply fundamentals that drove that extreme positioning have not resolved: Permian and Haynesville output is still rising, and the speculative community unwound only what weather forced it to.6
Wood Mackenzie offered a longer-range counterpoint in July 2026 (2026-07-08). The consultancy warned that the era of near-zero-marginal-cost US gas supply is narrowing. The share of production that can be brought on at minimal incremental cost is expected to fall below 20% over the next decade, meaning prices will need to rise and stay elevated to attract enough new molecules to market. Henry Hub, Wood Mackenzie noted, is a localized benchmark shaped by supply, demand, and infrastructure in southern Louisiana (not a clean national signal), which means Permian and Haynesville growth does not translate directly to the pricing point but does apply steady downward pressure on it.5
The more immediate pressure test is the pace of autumn storage builds. If weekly injections continue running above the five-year average through October, the inventory surplus entering the winter withdrawal season will limit how aggressively the market can price cold-weather demand. A second heavy short position, rebuilt since the August unwind, would require a sharper weather catalyst to produce a comparable squeeze — and without one, the production math from the Permian and Haynesville is likely to reassert itself through the remainder of the year.2,6,1