US Gas Production Hits Near-Record 109 Bcf/d While Storage Surplus Narrows

US Gas Production Hits Near-Record 109 Bcf/d While Storage Surplus Narrows NYMEX gas gained 7.4% in a week as LNG departures jumped 26 Bcf, but inventories remain 8% above last year with the $3 level still unbroken. Lower-48 dry gas production is estimated at 109.3 billion cubic feet per day, up 1.4% from a year ago and sitting near record levels, FX Empire reported. Domestic demand reached 73.0 Bcf per day. The gap between production and consumption defines the market's fundamental balance.⁴ NYMEX natural gas front-month June futures settled at $2.96 per million BTU on Friday, gaining 2.3% on the day and about 7.4% for the week. The rally came on expectations of hotter weather, stronger power-sector demand, and resilient LNG exports. Prices briefly dipped toward $2.75 before rebounding on short-term cold forecasts.³ The LNG export data is the bullish surprise in the week. Weekly vessel departures reached 141 Bcf, up 26 Bcf from the prior week despite maintenance activity at several export facilities. That is the largest week-on-week jump in departure volumes in months. Each Bcf of LNG that leaves the US is a Bcf that does not enter domestic storage.³ But the storage numbers temper the enthusiasm. Working gas fell by 52 Bcf for the week, well below the five-year average withdrawal of 168 Bcf. Inventories are 141 Bcf higher than a year ago, about 8% above last year's level. The market is running with a comfortable surplus.^1,2 When buying starts to fade, the market has nothing to support gains, as Wednesday's session demonstrated. The midweek pullback showed how quickly the rally unravels without sustained demand. The $3 level is the test. Prices have approached it multiple times without breaking through convincingly.⁴ US upstream M&A activity provides a structural read on where capital sees the gas cycle heading. Deal value hit $38 billion in Q1 2026, the highest quarterly total in two years, Enverus Intelligence Research reported. The Devon Energy and Coterra Energy merger accounted for about $25 billion. Over six months, total deal value exceeded $60 billion.⁵ But transaction count tells a different story. Only eight deals above $100 million were recorded in the quarter, tying a post-2020 low. The consolidation is concentrated in mega-deals. Mid-tier operators are on the sidelines. Enverus expects more private companies to come to market and continued consolidation among public operators as the cycle progresses.⁵ Comstock Resources, with 100% natural gas production, carries a Zacks consensus estimate for 2026 EPS showing a 37% year-over-year surge. That estimate prices in gas near current levels through summer. A sustained move above $3 driven by cooling demand and export pull would make the estimate conservative. A retreat below $2.75 would trigger a revision cycle.² The signal to watch is whether the 141 Bcf LNG departure rate sustains through June while summer cooling demand arrives. If both pull on the same supply base simultaneously, the 8% storage surplus compresses and NYMEX Henry Hub front-month breaks $3 with conviction. If either fades, the surplus persists and the rally stalls at the same level it has stalled three times already.^3,4