Wood Mackenzie Warns U.S. Gas Price Era of Cheap Supply Is Ending
A new Wood Mackenzie report forecasts NYMEX Henry Hub front-month gas approaching $5/MMBtu by 2035 as AI power demand and LNG export buildout absorb the shale surplus.
Wood Mackenzie said this week (week of 2026-06-29) that U.S. natural gas prices are set to rise steadily through 2035, ending a decade in which shale oversupply consistently held the NYMEX Henry Hub front-month benchmark near or below $3/MMBtu. The consultancy cited two structural demand drivers — rapid buildout of AI data center power loads and the tripling of U.S. LNG export infrastructure — as the forces eroding the supply cushion that kept domestic prices depressed.5
NYMEX Henry Hub front-month gas stood at $3.25/MMBtu as of the most recent session (2026-07-05). Wood Mackenzie forecasts prices approaching $5/MMBtu by 2035 — a 54% premium to current levels — on the back of soaring demand across power, industrial, and LNG export markets simultaneously. The consultancy's case is that all three demand categories expand in parallel rather than sequentially, creating a floor that supply growth alone cannot match.5
The export transformation has already been dramatic. U.S. LNG feedgas deliveries surged from 0.5 billion cubic feet per day (Bcf/d) in 2016 to 15.0 Bcf/d in 2025, EIA data show — a 30-fold expansion in under a decade. LNG now accounts for just over 15% of total domestic U.S. gas consumption, according to Charlie Riedl, executive director of the Center for LNG in Washington.5
The supply side has kept pace so far. EIA data show marketed natural gas production in the Lower 48 averaged 117.2 Bcf/d in the first quarter of 2026, a 4% increase from the same period a year earlier. The agency forecasts 3% production growth for the full year, driven mainly by the Permian Basin, which EIA expects to reach 29.2 Bcf/d in 2026, up 6% from 2025.1
But Wood Mackenzie's case rests on pace, not direction. Haynesville shale — the most direct feedstock for Gulf Coast LNG terminals including Sabine Pass — is forecast by EIA to grow 6% this year and 8% next, yet the new liquefaction capacity being sanctioned absorbs that growth and then some, tightening the domestic balance regardless of the headline production trajectory.1,5
Riedl sketched a longer-term scenario that underscores the scale of the structural change. By 2050, the U.S. could be exporting between 40 and 45 Bcf/d of LNG — "more than sort of almost a tripling" of the 15.0 Bcf/d the country currently ships, he said. Reaching that level would require domestic production well above current EIA forecasts, implying sustained price support well before 2050.5
Gulf Coast terminal utilisation is already near peak. LNG vessels departing U.S. ports have been running at high cadence, and Gulf Coast feedgas demand remains a steady bullish underpinning for NYMEX Henry Hub front-month prices, according to Natural Gas Intelligence data.2
Countering the structural picture in the near term, Asian spot LNG prices fell to 19-month lows in the week of 2026-05-11 as more supply hit the market and Chinese buying interest softened, Reuters reported, citing Refinitiv Eikon shipping data. Total LNG shipments into Japan, China, South Korea and Taiwan reached about 15.94 million tonnes in February, down nearly 19% from the prior month, Reuters data showed. Platts JKM LNG front-month traded at $16.07/MMBtu as of the most recent session (2026-07-05). Soft Chinese spot demand reduces the immediate pull on U.S. export volumes and could delay near-term feedgas tightening.3
The forward price path hinges on final investment decisions for the next wave of U.S. liquefaction capacity. If project sponsors secure long-term off-take contracts and sanction new trains through 2027-2028, the domestic demand floor for NYMEX Henry Hub front-month rises well ahead of Wood Mackenzie's 2035 target. If Asian demand softness persists and slows contracting, the timeline extends. Australian producers such as Santos, whose Barossa LNG project is advancing, will be watching whether NYMEX Henry Hub front-month's structural repricing lifts the global LNG price floor or simply compresses Atlantic arb margins at current Platts JKM LNG front-month levels.5,4