EIA Lifts Henry Hub Forecast While U.S. Storage Runs Above Average
The EIA raised its 2026 and 2027 Henry Hub price outlook in July, but a six-percent storage surplus and mild weather keep front-month prices near glut-season lows.
NYMEX Henry Hub front-month rose 0.75% on Tuesday (2026-07-28) to $2.68 per MMBtu, holding near glut-season lows even as the U.S. Energy Information Administration raised its Henry Hub spot price projection for both 2026 and 2027 in its July Short-Term Energy Outlook, published on July 15 (2026-07-15).5
The upward revision came with a complication for near-term bulls. U.S. working natural gas inventories ended June six percent above the five-year average, and the EIA forecasts that surplus will persist, with storage projected to reach 3,966 billion cubic feet by the end of October 2026. A building winter cushion is not the context in which gas markets typically rally hard.5
Wood Mackenzie added the structural argument. In a statement published on July 8 (2026-07-08), analyst Jerry Wang warned that the decade-long era of near-zero marginal cost supply growth is ending. The share of U.S. gas production growing at near-zero marginal cost is expected to fall below 20 percent over the next ten years, Wang said, down from levels that sustained cheap prices throughout the shale buildout. "With supply less responsive to price signals than it once was, prices will need to go higher and stay higher to bring new molecules to market," he said.4
That shift in the supply cost curve is not showing up in the prompt market. At $2.68, NYMEX Henry Hub front-month is trading at roughly the same level it closed during the week of May 11 (2026-05-11) — around $2.67 per MMBtu — a period when the world's largest LNG exporter was still partially offline, according to data cited by 247WallSt. The domestic market has been largely unresponsive to the supply shock that has repriced gas elsewhere.1
The contrast with global benchmarks is wide. Platts JKM LNG front-month traded at $21.32 per MMBtu on Tuesday (2026-07-28), while ICE Endex TTF front-month held at €58.23 per MWh. Both reflect the Strait of Hormuz disruption: by March 2026, the closure had removed almost 20 percent of global LNG supply, pushing Platts JKM LNG front-month price volatility to 300 percent on a monthly average — its third-highest monthly reading on record, according to Global LNG Hub. Asian markets faced the sharpest exposure, with Hormuz accounting for more than 25 percent of the region's LNG supply.2
Wood Mackenzie noted that NYMEX Henry Hub front-month remains a localized benchmark, shaped by supply, demand, and infrastructure conditions in southern Louisiana. The Atlantic arbitrage — whereby elevated ICE Endex TTF front-month and Platts JKM LNG front-month prices pull U.S. LNG export volumes higher — has kept export demand firm, but has not drained domestic storage fast enough to close the price gap with global markets.4
Near-term weather is working against structural bulls. Eli Rubin of EBW Analytics Group wrote in a report sent to Rigzone on Tuesday (2026-07-14) that milder weather was undermining near-term fundamentals in natural gas. With the July STEO storage trajectory pointing toward a large October surplus, the seasonal drag on NYMEX Henry Hub front-month prices is real.5
The EIA's price track record for 2026 has been uneven. In May 2026, ChAI Insight reported that the agency projected a Henry Hub average of roughly $3.80 per MMBtu for the year — itself a 13 percent decrease from the prior month's estimate. The July decision to raise the forecast suggests the EIA is pulling back from those downward revisions. But the gap between $3.80 and the current $2.68 illustrates how much ground the market would need to cover for the agency's central case to materialize.3,5
The immediate test is the weekly inventory build rate through August and September. If mild weather keeps power sector gas burn subdued and storage accumulation runs ahead of the 3,966 Bcf October target, front-month prices will stay under pressure regardless of what the structural supply cost curve implies for back years. If LNG export demand holds — sustained by the ICE Endex TTF front-month premium at €58.23 per MWh — draw volumes from Gulf Coast terminals could slow the build enough to give NYMEX Henry Hub front-month a firmer floor before winter demand arrives. The pace of that weekly storage data over the next six weeks is the number to track.5