Henry Hub flat at $2.91 as year-on-year storage gap narrows
Stocks sit above the five-year average, but year-on-year inventories are already trailing 2025 and Permian gas supply depends on crude prices that could reverse.
NYMEX Henry Hub front-month was flat at $2.91/MMBtu on Thursday (2026-09-17), pinned well below the $3.50/MMBtu average the EIA expects for the full year 2026. The bearish consensus rests on two foundations: record domestic production and a storage surplus above the five-year seasonal average. Both are real. The storage picture, examined from a different angle, is less straightforward.2
EIA data from August 2026 (2026-08-09) put inventories at 6.7% above the five-year seasonal average, the figure most sellers are citing. The same dataset showed stocks were already slightly below year-ago levels.6
Those two readings diverge for structural reasons. The five-year average blends in the pandemic demand trough and predates the scale of U.S. LNG exports that now absorb close to 15% of domestic production. Year-on-year is the more current measure of whether this injection season is building a genuine cushion or merely tracking historical norms. If stocks are already trailing 2025 despite record output, the five-year comparison overstates the supply buffer.6,3
The production data is large by any measure. EIA's August 2026 Short-Term Energy Outlook forecast U.S. marketed natural gas output averaging 122.5 Bcf/d in 2026, which would exceed the previous record of 118.5 Bcf/d set in 2025. Lower 48 production in Q1 2026 averaged 117.2 Bcf/d, up 4% year-on-year. The EIA's May 2026 STEO had Permian output at 29.2 Bcf/d in 2026, 6% above 2025 levels, with Haynesville growing 6% in the same period.5,1
Most of the Permian's gas is associated — produced alongside crude rather than targeted by gas economics. WTI crude front-month was at $101.83/bbl on Thursday (2026-09-17), high enough to keep oil rigs running and gas flowing. But associated gas supply responds to crude economics, not domestic gas prices. If crude turns lower, Permian gas volumes fall without the lead time dry-gas basins like Haynesville need to compensate. Bears counting on that supply cushion are exposed to an oil market with its own risks.1
LNG exports compound the complexity. U.S. LNG export capacity was near 14 Bcf/d in mid-2026, roughly 15% of domestic production, according to May 2026 market analysis. Asian LNG spot JKM was at $27.22/MMBtu on Thursday (2026-09-17), nearly ten times the Henry Hub level. The Atlantic arbitrage remains wide, keeping export terminals under commercial pressure to maximize throughput. Any feedgas demand increase from new capacity additions or stronger global pull translates directly into domestic tightness.3
EBW Analytics Group analyst Eli Rubin, in a report sent to Rigzone on Tuesday (2026-07-14), said mild weather was undermining near-term gas fundamentals. That fits the flat price. But the EIA raised its Henry Hub forecasts for both 2026 and 2027 in its July 2026 STEO, and Morgan Stanley has outlined a scenario in which prices reach $5/MMBtu, against the EIA's own full-year 2026 projection of just under $3.50/MMBtu.4,2
The gap between $2.91 and any of those forecasts rests on specific assumptions holding through autumn. Bears need the year-on-year storage deficit to stay contained, crude prices to remain supportive of Permian output, and LNG feedgas demand not to accelerate. The next weekly EIA storage report tests the first condition directly. Consecutive weeks in which builds trail the comparable 2025 period would begin to erode the premise that the five-year surplus is expanding rather than eroding.6