Is Natural Gas forming a long-term price bottom?
- Timothy Beggans
- Oct 2
- 2 min read
U.S. natural gas prices are showing signs of a floor, with Henry Hub averaging $3.66/MMBtu in 1H 2025, up sharply from 2024. Rising structural demand may anchor prices higher: AI-driven data centers, Bitcoin mining, and reshoring of manufacturing are adding steady baseload power demand.
Yet supply headwinds loom. By 2030, most of the Tier-1 acreage in the Haynesville, Marcellus, and Permian will be drilled out, forcing producers into less productive leases. Decline curves will steepen, break-evens rise, and takeaway constraints persist. Inflationary pressures in labor, materials, borrowing costs, and elevated debt from recent M&A further tighten margins.
On the demand side, LNG export growth is a key driver. Sempra’s Port Arthur Phase 2, NextDecade’s Rio Grande Train 4, and Venture Global’s CP2 have all reached FID, adding billions in investment and several Bcf/day of new demand. This supports prices, though analysts caution that an LNG oversupply by 2030 is possible if all projects proceed.
Where does the next big supply source come from? The Gulf of Mexico, with ~36 Tcf of technically recoverable gas, could see a revival due to its proximity to LNG export facilities. Appalachia still shows growth potential, while frontier plays like Alaska LNG may resurface if supported by policy.
Taken together, the U.S. gas market appears to be coalescing around a medium-term price floor in the $3.50–$5.50/MMBtu range. Strong demand growth, LNG exports, and rising costs support the base, but LNG oversupply risk and execution challenges remain.
Sources: EIA | Sempra Port Arthur LNG | NextDecade | Venture Global | OilPrice | Natural Gas Intel | EIA Today in Energy
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