Henry Hub spot natural gas averaged $2.93/MMBtu from June through August 2026, 6% below the same window a year earlier, according to the U.S. Energy Information Administration's September Short-Term Energy Outlook.

The price decline arrived despite exceptional demand pressure. NOAA data pegged the Lower 48 average July temperature at 77°F, the warmest July reading on record. Air-conditioning load typically lifts gas-fired generation during such spells; pricing nevertheless moved the opposite direction.

What offset the heat-driven demand?

EIA analysts identified three forces that capped upward pressure on Henry Hub through the summer:

• Renewable generation climbed sharply. Solar output rose an estimated 19.4 BkWh and wind by 9.3 BkWh versus the June–August 2025 comparison.
• Gas-fired generation still grew, but modestly — net gas-fired output rose 7.5 BkWh against the same 2025 baseline.
• LNG terminal maintenance tempered export-side demand growth at U.S. liquefaction facilities.

EIA estimates the renewable additions alone reduced the natural gas volumes required to meet peak summer electricity demand, noting that natural gas-fired power plants often serve as the marginal resource during high-temperature periods.

Supply ran at a record pace

U.S. dry natural gas production set monthly record highs through 2026. The September STEO now forecasts the annual figure at 111.2 Bcf/d, a new national record.

From June through August, Lower 48 output averaged roughly 2% (2.7 Bcf/d) above the same period in 2025. Growth concentrated across several producing regions, with the Permian cited as the most notable contributor. Higher output has supported domestic consumption and exports while simultaneously replenishing underground storage ahead of the heating season.

Storage enters autumn with a cushion

Working gas in underground storage entered the April 2026 injection season at 1,906 Bcf, 4% above the previous five-year average. Monthly injections came in above their respective five-year averages in each month of the injection season through August aside from May.

EIA's August STEO projects Lower 48 working gas inventories will finish October at 3,985 Bcf, 5% above the five-year average. The agency wrote that the combination of strong production and sustained injections has kept storage volumes at levels that "provide a substantial supply cushion heading toward the winter heating season."

What to watch

• November STEO release for any revision to the 111.2 Bcf/d 2026 production forecast and the implied supply-demand balance.
• LNG terminal restarts following summer maintenance and the pace of feedgas demand recovery into Q4.
• Winter heating-degree-day data once November arrives, set against the cushion already in storage.
• Permian output trajectory into year-end, with the basin cited by EIA as the most notable 2026 growth contributor.