Why Record Heat Failed to Lift U.S. Natural Gas Prices

Henry Hub natural gas averaged $2.93 per million British thermal units from June through August, about 6% lower than the same period in 2025, even as the Lower 48 recorded its hottest July on record. Strong growth in solar and wind generation, along with record U.S. production, robust storage injections and reduced LNG terminal throughput, kept supply ample through the summer peak.

By AI Newsroom· Reviewed by Pranav, Founder & Editor-in-ChiefPublished 1 minute agoUpdated 1 minute ago0 views

Why It Matters

The divergence between peak cooling demand and weaker gas prices highlights how rapidly expanding renewable generation and rising domestic production can blunt weather-driven demand shocks. That dynamic affects power-sector fuel mixes, storage balances and market signals for producers and generators.

Key Facts

Henry Hub summer average (June-August): $2.93 per million British thermal units
Change versus same period last year: 6% below
Lower 48 average temperature in July: 77°F (hottest July on record, per NOAA)
Solar generation increase (June-August vs 2025): 19.4 billion kilowatt-hours
Wind generation increase (June-August vs 2025): 9.3 billion kilowatt-hours

U.S. natural gas prices did not rise during the summer peak despite record heat in July, with Henry Hub averaging $2.93 per million British thermal units from June through August — roughly 6% below the same period a year earlier. The lower 48 states experienced an average July temperature of 77°F, according to NOAA, which pushed electricity demand higher as air-conditioning use climbed.

However, much of that additional power demand was met by renewable generation. The Energy Information Administration estimates solar output rose by about 19.4 billion kilowatt-hours over June–August compared with the same months in 2025, and wind added about 9.3 billion kWh. By contrast, gas-fired generation increased by roughly 7.5 billion kWh; the combined incremental output from wind and solar was nearly four times the gain from natural gas-fired plants.

Supply-side factors also kept the gas market well supplied. U.S. dry natural gas production averaged about 2.7 billion cubic feet per day more from June through August than a year earlier, a 2% rise with notable growth in the Permian. The EIA projects dry gas production to average a record 111.2 Bcf/d for 2026, and storage started the April injection season at 1.906 trillion cubic feet of working gas, around 4% above the previous five-year average.

Monthly injections outpaced five-year averages in every month through August except May, and maintenance at U.S. liquefied natural gas terminals reduced export-driven draw on supplies during the summer. The EIA now expects Lower 48 working gas inventories to reach about 3.985 trillion cubic feet by the end of October, roughly 5% above the five-year average. Taken together, stronger renewables, higher production and healthy storage prevented the summer heat from tightening the gas market enough to push Henry Hub above last summer’s average.