Henry Hub natural gas settled at $3.22/mmBtu on July 3, up 0.81 percent on the week. The Q3 2026 average stands at $3.21/mmBtu. The futures curve shows a seasonal winter premium, with December 2026 and January 2027 contracts trading above the prompt month, reflecting the market's expectation of winter heating demand and storage draw requirements. In Europe, TTF natural gas closed at 44.01 EUR/MWh, up 2.89 percent on the week, supported by continued LNG demand and the ongoing adjustment to reduced Russian pipeline flows.
The US natural gas market is in a fundamentally balanced position in mid-2026. Lower-48 marketed gas output averaged 117.2 Bcf/d in Q1 2026, and the EIA forecasts production averaging 118.9-120.8 Bcf/d for full-year 2026, rising to approximately 124 Bcf/d in 2027 — growth of 3.3 percent and 2.5 percent year-on-year, respectively. Growth is concentrated in the Permian Basin (associated gas from oil drilling), Appalachia, and the Haynesville Shale. Higher oil prices in the first half of 2026 have supported more associated gas production, adding to supply.
Demand growth is led by LNG exports and the power sector. LNG feedgas demand is expected to average 16-17 Bcf/d in 2026, up from approximately 15 Bcf/d in 2025, driven by the ramp-up of new liquefaction capacity at Plaquemines (Louisiana) and other facilities under construction. Total US gas demand, including exports, is expected to grow modestly in 2026 — approximately 0.6 Bcf/d — with stronger growth in 2027 (approximately 2.5 Bcf/d), predominantly driven by LNG feedgas. Power sector demand is supported by hot summer weather, growing data center electricity consumption, and ongoing coal-fired power plant retirements.
Storage inventories are in a relatively comfortable position for early July. The injection season is progressing at a rate that keeps storage on track to reach adequate levels ahead of the 2026-2027 winter heating season. The risk of a storage deficit — which drove Henry Hub above $10/mmBtu during the 2021-2022 winter — is minimal given the current production rates and LNG takeaway capacity balance.
International gas markets are tight but not in crisis. TTF at 44 EUR/MWh is above pre-2021 norms but well below the 2022 peak of 300+ EUR/MWh. European storage levels are adequate, and the rate of LNG imports has been sufficient to maintain balances without triggering a price spike. The global gas market is structurally tighter than it was before the Russia-Ukraine conflict, but the adjustment to new supply-demand patterns has been achieved without the acute crisis conditions of 2022.
Price forecasts for Henry Hub in H2 2026 cluster in a $2.80-3.80/mmBtu range. The EIA's short-term outlook expects prices to remain in the low $3s for the summer injection season, with potential for winter premium to push prices to $3.50-4.00/mmBtu in Q4 2026 if weather is colder than normal. The risk is skewed to the upside because the expanded LNG export capacity creates a permanent demand floor that was absent in previous years. A cold winter combined with stronger-than-expected LNG feedgas demand could challenge storage adequacy and push prices toward $4.50-5.00/mmBtu.
The US natural gas market is in a fundamentally different place from 2024-2025. LNG export capacity has expanded significantly, with Plaquemines and other terminals ramping up. LNG feedgas demand of 16-17 Bcf/d creates a structural demand floor that did not exist a few years ago. Combined with power sector demand from data centers and coal retirements, the US market now has a more diversified demand base. For procurement teams buying gas for industrial operations, the strategy should be to layer in winter hedges opportunistically. The futures curve shows a seasonal winter premium — December through January contracts trade above the current prompt — which reflects the market's expectation of 2026-2027 winter heating demand. Buyers with the flexibility to store injection gas should do so. The cash-and-carry economics of summer injection for winter withdrawal are favorable this year. For European buyers, TTF at 44 EUR/MWh is elevated relative to pre-crisis norms but well below the 2022 crisis peaks. The global gas floor is higher than historical averages because LNG demand has structurally increased.