(The Center Square) - The price of natural gas at the Henry Hub in Louisiana averaged $2.93 per million British thermal units from June through August, about 6% less than last year, even though the Lower 48 U.S. states recorded the hottest July on record and the demand for electricity soared.
Average temperatures across the Lower 48 reached 77 degrees Fahrenheit, in July, according to the National Oceanic and Atmospheric Administration, with total nationwide electricity sales hitting a record-shattering 415.2 billion kilowatt-hours for the month as air conditioners ran longer and harder.
Historically, intense late-summer heat waves have triggered massive price spikes, as seen when benchmark prices neared $10 per million Btu during the global energy crunch of 2022.
This year, data recently released by the U.S. Department of Energy shows record-high electricity demand in summer 2026 was met primarily with solar power generation, which was up 22% from same three months last year. Texas, the nation’s largest energy producer, has added 19.5 gigawatts of new solar capacity since 2023.
Total U.S. solar generation increased by an estimated 19.4 billion kilowatt-hours in June-August 2026 compared with the same period last year, the data shows.
Wind generation rose 9.3 billion kilowatt-hours in June-August, representing a 9.8% increase over the same period last year, while natural gas power grew only 7.5 billion kilowatt-hours, up 1.8%, the data shows.
“Increased renewable electricity generation, record natural gas production, and ample natural gas inventories helped limit upward pressure on prices,” the Energy Department said in an analysis of the summer electricity market published last week.
Global benchmark Henry Hub prices stayed under $3 per million Btu for most of the summer even as U.S. natural gas exported as liquified natural gas hit new record highs. U.S. LNG exports in July were up 18.7% from the same month last year, Energy Department data shows.
American LNG exports reached 35 different countries this summer, with the Netherlands, France and Italy the biggest buyers while companies in India, Japan and South Korea also purchased multiple cargos.
Energy Secretary Chris Wright said on X that the United States is “solidifying its position as the world's largest LNG supplier."
"Last year, for the first time in history, a country exported more than 100 million tons of LNG—and that country was the United States. And this year, we are on track to surpass 120 million tons," Wright said.
Sub-$3 Henry Hub natural gas prices are much lower than other commonly referenced global benchmarks such as the Dutch Title Transfer Facility and the Japan-Korea Marker, which in September averaged $25.42 per million British thermal units and $25.39 per million British thermal units, respectively.
In the most recent forecast, the Energy Department estimates domestic natural gas inventories in the Lower 48 states will total 3,985 billion cubic feet at the end of October, about 5% above the five-year average for that time of year.
