U.S. natural gas markets are balancing record LNG export demand against domestic consumption and production growth. Henry Hub futures have stabilized in the $3.20-3.60 per MMBtu range as the market absorbs new liquefaction capacity coming online through 2026. The Strait of Hormuz disruption has added another bullish variable: roughly 25% of global LNG transits Hormuz, and diversion of Qatari cargoes is reshaping trade flows across Europe and Asia.
Domestic production remains robust at approximately 105 billion cubic feet per day, with Appalachian and Haynesville basins leading output. Associated gas from Permian oil drilling contributes another significant volume, though midstream infrastructure constraints occasionally flare excess gas when takeaway capacity is limited. Storage levels sit within the five-year average range heading into the summer injection season.
LNG export capacity expansion is the dominant structural theme. Cheniere Energy, Sempra, Venture Global, and others are bringing new liquefaction trains online through 2026 that will add 8-10 billion cubic feet per day of export capacity. This capacity effectively reconnects U.S. gas prices to global LNG prices, which trade at premiums to Henry Hub due to liquefaction, shipping, and regasification costs. European TTF and Asian JKM benchmarks remain substantially above U.S. pricing.
Weather and storage dynamics will drive near-term pricing. The summer cooling season typically peaks U.S. power generation gas demand, particularly in the Southeast and Texas. A hot summer combined with stressed LNG exports could push Henry Hub into the $4+ range; a mild summer could pressure it back below $3. Producer hedging programs are locking in roughly 30-40% of forward production at current strip prices, suggesting the industry expects stable-to-firm pricing through the year.