US Gas Supply Growth Holds NYMEX Henry Hub Below $3
Lower 48 production is on track for a record in 2026, with Permian and Haynesville output absorbing demand and holding NYMEX Henry Hub near $2.83/MMBtu.
NYMEX Henry Hub front-month was last quoted at $2.83 per million British thermal units as of Sunday (2026-09-13), with markets closed for the weekend, sitting below a $3 threshold that record domestic supply growth has kept in place through much of 2026.1
The output figures are the story. Lower 48 marketed production averaged 117.2 billion cubic feet per day in the first quarter of 2026, up 4% from the same period in 2025, according to the EIA's May short-term energy outlook. The agency forecast full-year production 3% above 2025 levels, with most growth weighted toward the second half. If that materialises, 2026 will rank as a record year for US gas output.1
Two basins are doing most of the work. The Permian region, predominantly an oil basin where gas comes out as a byproduct, is forecast by the EIA at 29.2 Bcf/d in 2026, up 6% from 2025. The agency expects that pace to accelerate to 10% growth in 2027, once current pipeline constraints ease. The Haynesville shale in east Texas and northwest Louisiana, a dedicated gas play oriented toward LNG export demand, is pencilled in for 6% growth in 2026 and 8% in 2027.1
Permian gas flows regardless of what the Henry Hub spot price does, because it accompanies crude production that crude economics justify independently. Haynesville producers are responding to long-dated LNG offtake. Neither dynamic is sensitive to near-term Henry Hub moves, which is why supply has not stepped back to allow prices to recover.1,2
August showed how that dynamic plays out in positioning. On August 10 (2026-08-10), NYMEX Henry Hub futures for September delivery rose as much as 5.2% to $2.801 per million Btu, the largest intraday gain since May 28 (2026-05-28), after an unusually large shift in weather forecasts. Bloomberg reported the move was driven partly by short-covering among money managers who had been the most bearish on gas since 2020.5
It was not the first time speculative positioning amplified a swing. Bloomberg reported that in spring 2024, when the US market was historically oversupplied, a 288,000-contract short-covering event lifted futures by nearly $1 per million Btu before the physical balance reasserted itself. A January 2026 winter storm pushed futures up 75% in three days as production froze off, only for prices to retrace once supply resumed. Short squeezes can move Henry Hub sharply; the underlying supply curve stays where it is.5
Commercial participants are hedging accordingly. The Intercontinental Exchange reported record open interest across its North American financial natural gas markets as of July 14 (2026-07-14), attributing the growth to customers managing supply and demand dynamics across hubs. High open interest in a supply-heavy market typically reflects hedging of downside price exposure rather than speculative bullish positioning.4
Near-term demand has offered no compensating lift. EBW Analytics Group told Rigzone in a report that milder weather was undermining near-term fundamentals, a view that has dominated positioning for most of 2026. Still, the EIA raised its Henry Hub spot price forecast for both 2026 and 2027 in its July short-term energy outlook, suggesting the agency sees eventual seasonal tightening ahead.3
Wood Mackenzie has raised a longer-term caution. The consultancy warned that the share of US gas supply growth from near-zero marginal cost sources, dominant over the past decade, is expected to fall below 20% over the next ten years. As that cushion thins, new supply will require higher prices to justify investment. That structural argument sits well outside the 2026 trading horizon.2
What keeps the 2026 outlook weighted to supply is timing. The Permian pipeline constraints the EIA expects to ease in the second half of 2026 and into 2027 are central to its record production forecast. If that infrastructure relief comes through later than expected, the incremental supply the agency is counting on could slip, removing the main bearish anchor just as winter demand builds toward year-end.1