US natural gas production edged higher last week, with dry gas output reaching 103.2 Bcf/d. The primary driver was the Permian Basin, where associated gas from oil-directed drilling increased to 22.1 Bcf/d, up 0.5 Bcf/d from the prior week. With WTI still above $90/bbl, oil-directed drilling economics remain favorable, sustaining associated gas output.
The Haynesville shale, the second-largest gas-producing basin, held steady at 16.5 Bcf/d. The Haynesville rig count declined by 2 to 42 rigs, as producers continue to show capital discipline. Appalachian Basin production was flat at 35.8 Bcf/d. Total gas-directed rigs fell to 98, the lowest since March.
LNG feed gas demand was stable at 12.8 Bcf/d, with all terminals operating at or near capacity. Freeport LNG averaged 2.3 Bcf/d, while Sabine Pass processed 4.5 Bcf/d. Cheniere Energy announced that its Corpus Christi Stage 3 expansion is on track for Q1 2027, which would add an incremental 1.4 Bcf/d of export capacity.
The combination of rising production and stable LNG demand means the storage surplus is unlikely to narrow significantly in the near term. Unless a major heat wave drives cooling demand above 75 CDDs for a sustained period, the market will remain well supplied heading into the autumn injection season.
Sustained production above 103 Bcf/d with stable LNG exports points to continued ample supply. For buyers, this favors floating-price exposure in the near term. However, any supply disruption (hurricane, freeze-off) in a market with 12.4% storage surplus would see muted price response. Consider fixed-price hedges only if the September contract dips below $3.00.