Why did record heat fail to push US natural gas prices higher?

Natural gas prices at the Henry Hub averaged around $2.93 per million British thermal units from June through August, down 6% from the same period last year, despite the contiguous 48 US states recording their hottest July on record.

Temperatures across the contiguous United States averaged 77 degrees Fahrenheit in July, according to the National Oceanic and Atmospheric Administration (NOAA), driving electricity demand higher as air-conditioning use increased.

Solar and wind power met a significant share of that additional electricity demand.

Solar power generation increased by an estimated 19.4 billion kilowatt-hours from June through August compared with the same period in 2025, according to the US Energy Information Administration (EIA). Wind generation added another 9.3 billion kilowatt-hours.

By comparison, natural gas-fired electricity generation increased by around 7.5 billion kilowatt-hours.

The increase in electricity generation from wind and solar was therefore nearly four times the increase recorded by natural gas-fired generation over the summer.

Abundant supply boosts inventories

Natural gas supplies were also higher than last year. US dry natural gas production averaged around 2.7 billion cubic feet per day more from June through August, an increase of 2%, with the Permian Basin among the largest sources of growth.

The EIA expects dry gas production to average a record 111.2 billion cubic feet per day in 2026.

Natural gas inventories entered the injection season, which begins in April, with 1.906 trillion cubic feet of working gas in storage, 4% above the previous five-year average. Monthly injections exceeded their respective five-year averages in every month through August except May.

Maintenance at US liquefied natural gas facilities also limited growth in export-sector demand during the summer, leaving more gas available for power generation and storage.

The EIA expects working gas inventories across the contiguous 48 states to reach 3.985 trillion cubic feet by the end of October, nearly 5% above the five-year average.

The hottest July on record boosted natural gas-fired electricity generation, but the increase was not enough to tighten market conditions sufficiently to push Henry Hub prices above last summer’s average.

Record production, strong storage injections and the addition of roughly 29 billion kilowatt-hours of wind and solar generation helped keep the natural gas market well supplied throughout the peak summer cooling-demand months.