Henry Hub Climbs to $3.25 as Heat Wave Power Demand and Golden Pass Feedgas Pull Tighten US Gas Balance

Henry Hub natural gas spot prices rose 1.53 percent to $3.25 per MMBtu on Thursday, per Rigzone market data, driven by the combined pull of summer heat wave cooling demand and Gulf Coast LNG feedgas growth. U.S. gas-fired power plants supply roughly 40 percent of national electricity output and recorded a 27.1 percent month-to-date demand increase through June 25. Feedgas deliveries to all U.S. LNG export terminals averaged 18.1 billion cubic feet per day through June 24, running 19 percent above the same period in 2025.

Golden Pass Train 1 Becomes a New Haynesville Demand Sink

Golden Pass LNG, a joint venture between QatarEnergy and ExxonMobil, achieved first LNG production from Train 1 on March 30, 2026. Feedgas flows to the terminal near Sabine Pass, Texas have since ramped toward 800 million cubic feet per day. That volume moves primarily through Gulf Run Pipeline at up to 700 MMcf/d of capacity, supplemented by Midcoast Energy at up to 200 MMcf/d.

Those pipelines redirect gas that previously flowed on Transco, Texas Eastern, Tennessee Gas Pipeline, and NGPL, redistributing regional supply toward the LNG terminal. East Daley Analytics described Golden Pass as becoming "a meaningful demand sink for Haynesville supply," tightening that basin's gas balance as throughput ramps. Trains 2 and 3 at the QatarEnergy-ExxonMobil facility are targeted for 2027 startup, which would add approximately 1.6 Bcf/d of incremental feedgas demand.

The EIA projects full-year 2026 U.S. LNG exports at 17.2 Bcf/d, rising to 18.6 Bcf/d in 2027, per the June 9 Short-Term Energy Outlook. Both figures are above year-to-date feedgas averages, implying further feedgas growth in the second half of 2026. LNG feedgas demand rose 23.6 percent above year-ago levels for June month-to-date, the fastest year-on-year pace recorded in 2026, per the AGA June 25 market indicators report.

Asian LNG Netbacks Sustain the Export Incentive

This outlet reported earlier this week that JKM LNG prices averaged $17.33 per MMBtu in June, sustained by Japan's coal-to-gas switching and regional Asian demand. Against Thursday's Henry Hub spot price of $3.25 per MMBtu, that gap of $14.08 per MMBtu keeps U.S. export terminals fully incentivized to pull maximum Haynesville and Permian-associated gas volumes. That netback advantage underpins the 23.6 percent year-over-year feedgas growth recorded for June, per the AGA report.

Total gas demand, including pipeline exports to Mexico at 6.3 Bcf/d for the week ending June 24, rose 2.8 percent year-over-year through June 25. Canadian pipeline imports of 4.3 Bcf/d in that week provided an additional supply buffer, though volumes fell 1.6 percent week-over-week. Domestic demand alone rose 3.3 percent month-over-month through June 25, a pace consistent with seasonal cooling load patterns.

Storage Surplus Limits the Upside

Working gas inventories stood at 2.8 trillion cubic feet for the week ending June 19, sitting 5.7 percent above the five-year seasonal average and 1.7 percent below year-ago levels. All five EIA storage regions ended above their respective five-year averages that week. The most recent weekly injection of 76 billion cubic feet reflects continued robust supply even as demand rises.

U.S. dry gas production grew nearly 4 percent year-over-year through June 25, with Permian Basin-associated gas volumes rising roughly 60 percent between 2021 and 2025. That production growth has limited the pace of storage draws despite the summer demand surge. The EIA cited higher-than-expected Permian associated gas as the primary reason it cut its 2027 Henry Hub forecast by $1.13 per MMBtu in the June 9 STEO, compared with the January 2026 outlook.

EIA Forecasts $3.34 Per MMBtu for the Second Half of 2026

The EIA's June 9 Short-Term Energy Outlook projects Henry Hub spot prices averaging $3.34 per MMBtu for the second half of 2026 and $3.46 per MMBtu in 2027. The AGA June 25 report showed the July futures contract settled at $3.22 per MMBtu on June 24, $0.20 per MMBtu below the 12-month forward curve average. Thursday's spot price of $3.25 sits between that July settlement and the EIA's 2H26 forecast, within a $0.24 per MMBtu band.

At 18.1 Bcf/d, U.S. LNG feedgas now represents approximately 16.5 percent of estimated domestic dry gas production of around 109 Bcf/d. Golden Pass Train 1 alone accounts for approximately 4.4 percent of that feedgas total at its 800 MMcf/d ramp capacity. Trains 2 and 3, targeted for 2027, would bring the full Golden Pass facility to approximately 2.4 Bcf/d of feedgas demand, raising its share of projected 2027 U.S. LNG exports to roughly 13 percent.