EIA Lifts 2026 U.S. Gas Output Forecast to Record as Permian Associated Gas Surges
EIA's August outlook projects U.S. marketed gas at a record 122.5 Bcf/d for 2026, with the Permian the primary driver despite months of negative regional prices.
The U.S. Energy Information Administration, in its August 2026 Short-Term Energy Outlook published on August 12 (2026-08-12), raised its forecast for U.S. marketed natural gas production to 122.5 billion cubic feet per day for the full year. That would set a new record, surpassing the previous high of 118.5 Bcf/d reached in 2025.7
The Permian Basin is driving most of that growth. EIA data from June show the region's marketed gas production climbed from 17.2 Bcf/d in 2021 to 27.6 Bcf/d in 2025, a 60% increase over four years. Crude oil production in the basin grew more slowly over the same period, rising 39% from 4.7 million barrels per day.5
The gap between those two growth rates reflects the nature of Permian geology. Gas comes up with oil whether producers want it or not. Drill for crude, get gas. Producers have no mechanism to produce one without the other.5
That dynamic put Permian gas in an uncomfortable position for much of 2026. Regional gas prices were negative for most of the first half of the year, Oilprice.com reported in July (2026-07-22), meaning producers were paying customers to take delivery. Flaring within permitted limits absorbed some of the overhang. The problem was not demand; it was takeaway capacity.4,6
Drilling kept rising regardless because the oil side of the equation was profitable. Three months after the war in Iran sent crude prices soaring, independent oil companies were still ramping Permian activity as of early June (2026-06-05), E&E News reported. The estimated output gain from that ramp-up was roughly 250,000 barrels per day — not enough to shift global oil supply in a material way, but enough to keep associated gas volumes growing. WTI crude front-month was priced at $84.32 per barrel on Wednesday (2026-08-19).2
NYMEX Henry Hub front-month was at $2.81 per MMBtu on Wednesday (2026-08-19), well above what Permian producers were receiving at the basin. The spread reflects constrained egress rather than any fundamental shift. Until more pipeline capacity exits the basin, regional producers remain price-takers in the weakest part of the market.4,6
EIA expects infrastructure relief to arrive before year-end. The three largest new gas pipelines scheduled to enter Texas service by the end of 2026 are the Hugh Brinson Pipeline, the Rio Bravo Pipeline Project, and the Blackcomb Pipeline, according to EIA data. If those projects reach commercial operation on schedule, the negative basis in the Permian should narrow considerably.6
The EIA's May 2026 STEO had forecast the Permian would produce 29.2 Bcf/d for the full year, roughly 6% above 2025 output, with growth accelerating to 10% in 2027 once new pipeline capacity is absorbed. The Haynesville, the country's primary dry-gas producing region, is projected to grow 6% this year and 8% next — though Haynesville volumes respond more directly to hub prices than to oil drilling economics.1
Texas statewide production data from the Railroad Commission provide a current read, with the standard caveat that preliminary figures revise upward as late reports are filed. The RRC's preliminary crude oil total for March 2026 was 132.08 million barrels, against an updated 146.20 million barrels for March 2025. Preliminary gas output for March 2026 came in at 1.08 trillion cubic feet, versus an updated 1.12 trillion cubic feet a year earlier. Martin County led crude production with 20.9 million barrels. Webb County topped gas output with 88.8 billion cubic feet.3
The apparent year-on-year declines in the March data will narrow once revisions are complete. But the directional read is stable: Permian gas volumes are growing fast, and the basin's infrastructure is still catching up.
If commissioning of Hugh Brinson, Rio Bravo, or Blackcomb slips into 2027, negative basis pricing could persist into the winter heating season, putting additional pressure on producers already paying to offload gas in one of the most productive oil basins in the world.6,1