The average price of natural gas at Henry Hub from June to August was $2.93 per million British thermal units, which is 6% lower than the same period last year. Meanwhile, U.S. states experienced their hottest July on record with an average temperature of 77 degrees Fahrenheit.
Increase in Electricity Demand and Share of Renewable Energy
According to NOAA data, high temperatures in July led to increased electricity demand and consequently more activity from air conditioning units. In this context, solar and wind energy significantly covered this additional demand. Estimates indicate that solar energy production from June to August increased by 19.4 billion kilowatt-hours compared to the same period in 2025. Additionally, wind energy production added another 9.3 billion kilowatt-hours to this figure.
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Natural Gas Production and Storage
Dry natural gas production in the U.S. averaged 2.7 billion cubic feet per day during this period, representing a 2% growth. The Permian Basin is recognized as one of the largest sources of production growth. Forecasts suggest that dry natural gas production will reach a record 111.2 billion cubic feet per day by 2026.
Gas storage at the beginning of the injection season (April) was at 1.906 trillion cubic feet of working gas, 4% higher than the five-year average. Monthly injections in all months until August, except for May, exceeded their five-year averages. Additionally, storage at U.S. LNG terminals reduced demand growth from the export sector during the summer, making more gas available for electricity generation and storage.
It is expected that working gas reserves in U.S. states will reach 3.985 trillion cubic feet by the end of October, which is about 5% higher than the five-year average. Ultimately, unprecedented production and strong injections into reserves adequately supplied the gas market during the peak heat months and prevented Henry Hub prices from rising above last year's average.
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