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US Natural Gas Update: Futures Hit 3-month Low on Weak Demand, Record Output

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US natural gas futures fell in midday trading Tuesday, extending losses after a more than 4% decline in the previous session, as robust production and softer cooling demand across major East Coast population centers weighed on the market.

The front-month Henry Hub contract dropped 3.18% to $2.679 per million British thermal units, while the continuous contract declined 3.05% to $2.703/MMBtu.

Prices touched their lowest levels in three months as traders assessed growing signs of supply pressure, Trading Economics said.

NRG Energy said milder temperatures across the eastern US have reduced cooling demand, putting downward pressure on overall natural gas consumption.

Total US gas demand is forecast to fall by 1.3 billion cubic feet per day to 112.3 Bcf/d, driven largely by a 1.2 Bcf/d decline in power-sector gas burn as electricity demand eases across much of the region.

Production growth has added to concerns about a well-supplied market. Average natural gas output in the Lower 48 states increased to 110.6 Bcf/d so far in July from 110 Bcf/d in June, matching the monthly record high set in December 2025, according to Trading Economics.

Aegis Hedging said Permian Basin gas production climbed to a record-breaking 24.9 Bcf/d in July.

Rising output has contributed to concerns about excess supply, with inventories standing 6.4% above the five-year seasonal average as of July 17. Storage levels are expected to rise further to 6.6% above normal for the week ending July 24, Trading Economics said.

LNG feedgas demand is forecast at 17 Bcf/d amid ongoing maintenance at Freeport LNG, NRG said. Trading Economics reported that average gas flows to major US export terminals were 17.2 Bcf/d so far in July, down slightly from the June average of 17.4 Bcf/d.

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