US Gas Falls to Two-Month Low as Output Surge Overshadows Ras Laffan Supply Hit
Qatar says Iranian attacks took 17% of Ras Laffan's capacity offline for up to five years, but surging lower-48 output is pulling front-month prices to two-month lows.
August NYMEX natural gas futures (NGQ26) closed down 1.46% on Monday (2026-07-13), settling at a two-month low as stronger US production and a week-on-week decline in feedgas flows to export terminals took precedence over a disclosure from Qatar that carries years of supply implications.3
Qatar confirmed that Iranian attacks damaged 17% of the Ras Laffan industrial complex's LNG export capacity, with repairs expected to take three to five years. Ras Laffan accounts for roughly 20% of global LNG supply. A sustained reduction in output from the world's largest LNG exporting hub will force European and Asian buyers to secure replacement cargoes from other suppliers, and US terminals are positioned as the most accessible alternative.3
Near-term market signals pulled in the other direction. Lower-48 dry gas production on Monday (2026-07-13) ran at 113.2 billion cubic feet per day, up 5.5% year-on-year according to BNEF data, while demand across the lower-48 states was 77.4 bcf/day, a 4.2% year-on-year gain.3 Production outpaced demand by a wide margin, leaving the market short of the export outlet needed to absorb the surplus.
LNG feedgas flows to US export terminals fell to 17.5 bcf/day on Monday (2026-07-13), 5.8% below the prior week's level according to BNEF, and sellers treated the drop as a reason to trim exposure at the front of the curve.3 NYMEX Henry Hub front-month was trading near $2.90 per MMBtu on Tuesday (2026-07-14), still short of the EIA's full-year average forecast of just under $3.50/MMBtu and well below the $5.00/MMBtu level Morgan Stanley has projected for a more bullish scenario.3,2
The divergence between Monday's (2026-07-13) bearish price action and the longer structural case for US exports reflects different time horizons. Traders pricing the August (NGQ26) contract responded to Monday's (2026-07-13) output and flow data. Buyers looking to replace Qatari supply are operating on a three-to-five year frame in which impaired Ras Laffan capacity opens sustained demand for US LNG — a dynamic that does not show up in feedgas flows over any single week.3
EIA data showed marketed production in the lower-48 averaged 117.2 bcf/day in the first quarter of 2026 (1Q26), 4% above the same period in 2025.1 The agency forecasts full-year 2026 output to rise 3% against 2025, driven primarily by the Permian Basin, which EIA projects will produce 29.2 bcf/day this year — 6% above 2025 levels — with a further 10% increase in 2027.1 Haynesville is forecast to grow 6% this year and 8% in 2027.1 That supply trajectory will press on NYMEX Henry Hub front-month prices unless export demand expands to absorb it.
Power sector consumption provided partial support. The Edison Electric Institute reported on Wednesday (2026-07-08) that US electricity output in the week ended July 4 rose 7.73% year-on-year to 100,996 gigawatt-hours, reflecting summer cooling load across the lower-48.3 On a rolling annual basis, electricity generation in the 52 weeks ending July 4 was 2.33% above the prior-year period.3 Summer heat remains the most reliable short-term demand lever for domestic gas, but it has not been enough to offset the production surge recorded on Monday (2026-07-13).
The Ras Laffan repair window is the variable most likely to shift the structural outlook for US LNG exports. Three to five years is long enough to justify new offtake agreements with US terminals, and short enough that existing contracts will be repriced on renewal.3 Whether Monday's (2026-07-13) decline in feedgas flows represented routine operational variation or an early signal of softer global LNG pull will matter more than any single session of lower-48 production data. If Asian and European buyers move to lock in US supply at scale, feedgas demand will recover and press against the output overhang — but that reallocation unfolds over months, not the next contract roll.3