Why Record Heat Failed To Lift US Natural Gas Prices

Authored by Julianne Geiger via OilPrice.com,

Henry Hub natural gas averaged $2.93 per million British thermal units from June through August, 6% below the same period last year, even with the Lower 48 posting its hottest July on record.

Average temperatures across the Lower 48 reached 77°F in July, according to NOAA, pushing electricity demand higher as air conditioners ran harder.

Solar and wind took a large share of that extra power demand.

Solar generation increased by an estimated 19.4 billion kilowatt-hours from June through August compared with the same period in 2025, according to the Energy Information Administration. Wind generation added another 9.3 BkWh.

Natural gas-fired generation increased by 7.5 BkWh.

The increase from wind and solar was nearly four times the increase from natural gas-fired generation during the summer.

Gas supply was also running ahead of last year. U.S. dry natural gas production averaged 2.7 billion cubic feet per day more from June through August, a 2% increase, with the Permian among the biggest sources of growth.

EIA expects dry gas production to average a record 111.2 Bcf/d for 2026.

[ZH: Quite a different picture for the Europeans…]

Storage entered the April injection season with 1.906 trillion cubic feet of working gas, 4% above the previous five-year average. Monthly injections beat their respective five-year averages in every month through August except May.

Maintenance at U.S. LNG terminals moderated demand growth from the export sector during the summer, leaving more gas available for power generation and storage.

EIA expects Lower 48 working gas inventories to reach 3.985 trillion cubic feet by the end of October, about 5% above the five-year average.

The hottest July on record increased gas-fired power generation without tightening the market enough to lift Henry Hub above last summer’s average.

Record production, strong storage injections and nearly 29 BkWh of additional wind and solar generation kept the gas market well supplied through the peak cooling months.