US Gas Futures Slide as Storage Surplus Outlasts Ras Laffan Shock
NYMEX Henry Hub front-month fell to $2.69/MMBtu on Wednesday despite months of Ras Laffan disruption lifting JKM and TTF far above pre-closure levels.
NYMEX Henry Hub front-month traded at $2.69/MMBtu on Wednesday (2026-08-05), down 0.74% on the day, five months after the February 28 (2026-02-28) Strait of Hormuz closure removed roughly 20% of global LNG supply from the market. The geopolitical shock has driven European and Asian gas prices sharply higher. It has not moved Henry Hub in the same direction.1
The divergence traces to physical export limits. US LNG terminals were already running at 94% of maximum DOE-approved export levels in March (2026-03), the EIA's Short-Term Energy Outlook showed, up from an estimated 17.3 bcf/day in February (2026-02) at 91% utilization. When the ceiling is near, there is little capacity to arbitrage a domestic surplus against global tightness.1
Qatar's Ras Laffan Industrial City has had 17% of the world's largest natural gas export plant offline since the closure, according to data reported in June (2026-06-11). The EIA estimated in late April (2026-04-28) that the disruption affected over 10 bcf/day of global LNG supply, roughly 20% of the market. Asian LNG benchmark JKM traded at $21.17/MMBtu on Wednesday (2026-08-05). ICE Endex TTF front-month held at €55.92/MWh on the same date. Both reflect a market priced well above levels consistent with Qatar running at pre-closure capacity.4,1
Henry Hub has dropped 9% since the February 28 (2026-02-28) closure, the EIA said in its analysis for the week ending April 24 (2026-04-24). TTF increased to $14.80/MMBtu for the same week, 35% above pre-closure levels. The spread between the two benchmarks has widened to a gap that existing export infrastructure cannot bridge.1
Domestic supply has simply been too ample to shift. Total inventories were running 6.2% above the five-year average in early June (2026-06-04), with the surplus showing no sign of shrinking in the weeks following, according to EIA data. Feedgas flows to US LNG terminals hit 18.6 bcf/day for the week ending June 6 (2026-06-06), up 9.3% from the prior week, channeling more supply offshore. The storage cushion held regardless.3,4
Power demand has offered some pull. Edison Electric Institute data showed US electricity generation up 2.13% year-over-year for the week ending June 6 (2026-06-06), following a 6.4% gain for the week ending May 30 (2026-05-30). Over the preceding 52 weeks, generation ran 2.18% above year-ago levels. Summer heat translates into air-conditioning load and gas burn at power plants. The draw has not been large enough to dent the inventory buffer.3,4
The market attempted a rally in early June (2026-06-03). July NYMEX Natural Gas gained nearly 1.5% on Wednesday (2026-06-03) and extended gains in early Thursday (2026-06-04) trading, with analysts expecting a 99 bcf storage build against a five-year seasonal average of 101 bcf. A week earlier, the contract closed up 6.14% on Thursday (2026-05-28) after EIA data showed a 92 bcf build for the week ended May 22 (2026-05-22), below expectations — a sign that tighter-than-forecast builds can ignite short covering.3,2
But supply absorbed each move. FX Empire reported on June 11 (2026-06-11) that the storage surplus was not shrinking even as feedgas exports ran at elevated rates, noting that LNG flows were doing "more heavy lifting than usual." Supply was leaving the domestic market at pace. The inventory overhang remained.4
With US export capacity near its ceiling and Ras Laffan still running below pre-closure rates, the spread between Henry Hub and JKM persists. Narrowing it would require additional US liquefaction capacity coming online, a sustained run of below-average domestic storage builds through peak summer demand, or a Ras Laffan recovery that eases pressure on JKM and TTF. The next weekly EIA storage print will show whether summer heat has finally begun to make a dent.4,1