Henry Hub natural gas futures settled at $3.225/mmBtu on Wednesday, up 1.83% from Tuesday's close. The modest advance extended the gradual upward trend that has characterized the gas market since April, as the market transitions from the shoulder season to summer cooling demand.
LNG export demand remains the dominant structural driver of US natural gas prices. Feed gas deliveries to US LNG terminals are running at approximately 13.5 billion cubic feet per day (Bcf/d), with new liquefaction capacity at Plaquemines and Corpus Christi Stage 3 continuing to ramp up.
US natural gas production remains steady at approximately 108 Bcf/d, with modest growth in the Permian associated gas partially offset by declines in the Haynesville and Appalachian basins. The production profile has changed significantly: the Permian now accounts for over 30% of total US gas output, up from 20% five years ago.
Storage inventories stand approximately 200 Bcf above the five-year average, providing a comfortable buffer heading into the summer cooling season. However, the storage surplus has narrowed from 350 Bcf at the start of 2026, as higher LNG exports and steady domestic demand have drawn down the excess.
The forward curve is in contango through Q3, reflecting the market's expectation of continued storage builds through the injection season. Winter strip prices at $4.00-4.50/mmBtu reflect the structural support from growing LNG export capacity.
Gas buyers should monitor the narrowing storage surplus. If the surplus continues to decline, prices could shift higher through Q3. Consider securing winter coverage at current strip levels ($4.00-4.50/mmBtu) as LNG demand growth provides a structural price floor.