Henry Hub Holds at $2.75 as Permian Growth and Pipeline Constraints Cap Near-Term Upside
Lower 48 production is rising faster than takeaway capacity can route gas to LNG terminals, keeping NYMEX front-month pinned despite wide international spreads.
NYMEX Henry Hub front-month was trading at $2.75 per million British thermal units on Monday (2026-08-24), down 0.72% on the session. EIA's July 2026 Short-Term Energy Outlook raised its Henry Hub price projection for 2026 and 2027, yet domestic supply growth and pipeline constraints have left spot prices well short of where the agency's medium-term outlook would imply.5
The gap with global markets is wide. ICE Endex TTF front-month was trading at €68.31 per megawatt-hour on Monday (2026-08-24), up 3.77%, while JKM Asian LNG stood at $23.51 per million BTU. EIA noted in a late-April 2026 report that European and Asian prices had diverged from U.S. levels following the February 28 closure of the Strait of Hormuz.4 The spread reaches Henry Hub only through U.S. LNG export terminals, where long-term contracts and finite liquefaction capacity limit how quickly overseas demand becomes domestic price support.4
Lower 48 marketed gas production averaged 117.2 billion cubic feet per day in the first quarter of 2026, up 4% on the same period in 2025, EIA data show.1 The agency's May 2026 Short-Term Energy Outlook forecast a further 3% production increase for the full calendar year, driven mainly by the Permian Basin, which is projected to reach 29.2 Bcf/d in 2026, or 6% above its 2025 output.1 Haynesville, which feeds Gulf Coast LNG export terminals directly, is expected to grow 6% this year and 8% next year.1
Permian growth is running into its own near-term ceiling. EIA flagged existing pipeline takeaway constraints in the region but expects those to ease by late 2026, after which it forecasts Permian output growing 10% through 2027.1 Until that capacity arrives, Permian gas has limited routes to the Gulf Coast and to LNG terminals where it could tighten the Henry Hub supply balance.1
Wood Mackenzie has argued the longer-term supply picture is shifting in ways current prices do not reflect. The consultancy warned that near-zero marginal cost gas production, which supported Henry Hub throughout the past decade, is expected to account for less than 20% of total U.S. output over the next ten years.3 Analyst Wang said that with supply less responsive to price signals, prices will need to go higher and stay higher to bring new molecules to market.3
Wood Mackenzie also noted that Henry Hub remains a localized benchmark shaped by supply, demand, and infrastructure conditions in southern Louisiana — a point that helps explain why regional surpluses elsewhere have not pulled the Gulf Coast price lower.3
Pacific region gas storage stood 30.9%, or 69 billion cubic feet, above its five-year average as of the week ending May 22, 2026, EIA data show, a surplus that had persisted since the first week of December 2025.2 California consumed a record low 4.8 Bcf/d of natural gas in 2025, down 7% from 2024.2 That glut has remained a West Coast phenomenon rather than pulling Henry Hub lower.2
Near-term weather is not adding support. Eli Rubin, an analyst at EBW Analytics Group, wrote in a report sent to Rigzone on Wednesday (2026-07-15) that milder conditions were undermining near-term fundamentals, a drag that compounds the effect of rising production as late-summer cooling demand fades.5
If Permian pipeline relief slips past EIA's late-2026 schedule, additional Haynesville output and rising LNG pull will face constrained routes southward, leaving the NYMEX Henry Hub front-month with limited upside before winter demand sets in.1