US natural gas price

US natural gas is one of the world’s largest energy markets, with production of about 105 Bcf (billion cubic feet) a day. In the short term, the Henry Hub price is driven most strongly by weather: an unusually cold winter in the US north-east can lift heating demand, while a hot summer can raise power demand for air conditioning. Gas-fired power plants account for about 40% of US electricity generation. Weekly changes in storage inventories are published by the EIA Weekly Natural Gas Storage Report every Thursday at 10:30 eastern time. Any deviation from the typical 1,500–4,000 Bcf range is quickly reflected in prices.

The medium-term price level is shaped by the expansion of LNG export capacity. US liquefaction capacity has risen to about 14 Bcf/d, meaning 13–14% of domestic production is now exported. New LNG terminals, including Sabine Pass, Corpus Christi, Plaquemines and Rio Grande LNG, link Henry Hub more closely to Europe’s TTF and Asia’s JKM benchmarks. If the European gas market comes under stress — for example because of a loss of Russian pipeline gas or a cold European winter — US LNG arbitrage can also pull Henry Hub higher.

Over the longer term, the dynamics of shale gas production exert downward pressure on prices. The Marcellus in Pennsylvania and West Virginia, the Haynesville in Louisiana and Texas, and the Permian Basin in Texas and New Mexico, where gas is produced alongside oil, account for about 75% of US output. Drilling activity, tracked by the Baker Hughes Rig Count, and the number of drilled but uncompleted wells (DUCs) tend to follow prices with a lag of six to 12 months, creating periods of surplus or shortage.