Wood Mackenzie: Era of US$2–4/mmbtu Henry Hub natural gas prices ending as demand and supply conditions shift toward US$5/mmbtu (real) by 2035

Sustained AI-driven power demand and maturing US gas supply signal a structural shift in what drives Henry Hub price formation

LONDON/HOUSTON/SINGAPORE, July 02, 2026 (GLOBE NEWSWIRE) -- INSIGHT FOR IMMEDIATE RELEASE

The decade of cheap Henry Hub gas is coming to an end. Wood Mackenzie forecasts Henry Hub natural gas prices approaching US$5/mmbtu (real) by 2035, up from a nominal range of US$2 to US$4/mmbtu that held for most of the past decade.

That stability underpinned the buildout of US LNG export infrastructure and the expansion of gas-fired power generation now supporting AI-driven data centre growth across the country. Wood Mackenzie’s report, Defying gravity: why US Henry Hub natural gas prices are set to rise, sets out why those conditions are no longer assured.

Two structural shifts are working in the same direction at once. Demand continues to grow at a sustained pace. Supply is becoming harder and more expensive to grow.

“The conditions that kept Henry Hub between US$2 to US$4/mmbtu for the best part of a decade are no longer all operating at full force,” said Kristy Kramer, Head of LNG Strategy and Market Development at Wood Mackenzie. “Rapid play development, near-zero-cost associated gas, and year-on-year productivity gains drove that era of cheap, stable prices. Those tail winds have largely run their course. Power sector demand alone is calling for an additional 17 bcfd by the mid-2030s, and the highest-quality acreage is already in production. Prices will need to rise to grow supply from here.”

Demand: numbers that move markets

The power sector is now the primary source of new US gas demand. Load growth from data centres and AI investment is set to add the equivalent of roughly half the gas demand of the entire existing power sector: an additional 17 bcfd by the mid-2030s, a near-50% increase from 2025 levels Investment decisions for new US LNG export capacity reached a record high in 2025, with further projects reaching final investment decision in 2026. US LNG capacity is on track to more than double from current levels. The US is forecast to account for more than one-third of global LNG supply in the early 2030s. Demand expansion is expected to continue into the 2040s.

As the power sector leans more heavily on gas to balance intermittent renewable generation, demand has become structurally more volatile. Henry Hub prices will reflect that.

Supply: it’s complicated and continues to evolve

US producers have spent years drilling their best acreage. As the highest-quality portions of Marcellus, Permian and Haynesville are developed, remaining inventory will be less productive and more geologically complex. Breakeven costs have stopped falling. Technology gains in mature plays are incremental rather than transformative.

"Associated gas accounted for roughly half of all US gas supply growth over the past decade at near-zero marginal cost. Over the next ten years, that share is expected to fall below 20%," said Dulles Wang, Director, Americas Gas and LNG Research at Wood Mackenzie. "With supply less responsive to price signals than it once was, prices will need to go higher and stay higher to bring new molecules to market, particularly from dedicated gas producers."

For upstream operators, LNG project developers and counterparties in long-term offtake negotiations, the price trajectory in this report is a direct input to investment decisions being made now. The shift in price formation at Henry Hub, from supply-driven to demand-driven, changes the risk calculus for any position exposed to US gas economics.

Henry Hub remains a localised benchmark, shaped by supply, demand and infrastructure conditions in southern Louisiana. This forecast does not imply uniform price movements across all US gas markets.

"The scale of the US LNG position may look like a commercial advantage," said Kramer. "But as the US moves past one-third of global LNG supply in the early 2030s, buyers are already asking questions about over-reliance on a single supply source. Those questions will only get louder."

Background:

Wood Mackenzie's forecast of rising Henry Hub prices has been a defining and contested position over the past 18 months, generating sustained debate among utilities, LNG buyers, upstream operators and financial institutions.

The Horizons report examines the principal risks to the forecast in both directions, including the potential for non-listed and internationally backed operators to accelerate supply, dormant or frontier plays to prove viable at scale, and a material slowdown in AI-driven power demand or global LNG trade growth.

Wood Mackenzie’s Horizons report, Defying gravity: why US Henry Hub natural gas prices are set to rise, is available to clients via Wood Mackenzie Lens. To request the full report or arrange a briefing, visit woodmac.com.

-ENDS-

For further information please contact Wood Mackenzie’s media relations team:

Chris Boba
+44 7408 841129
Chris.Boba@woodmac.com

Mark Thomton
+1 630 881 6885
Mark.thomton@woodmac.com

Hla Myat Mon
+65 8533 8860
hla.myatmon@woodmac.com

Angelica Juarez
angelica.juarez@woodmac.com

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About Wood Mackenzie:

Wood Mackenzie is the global leader in analytics, insights and proprietary data across the entire energy and natural resources landscape. For over 50 years our work has guided the decisions of the world’s most influential energy producers, utilities companies, financial institutions and governments. Now, with the world’s energy system more complex and interconnected than ever before, sector-specific views are no longer enough. That’s why we’ve redefined what’s possible with Intelligence Connected: the fusion of our unparalleled proprietary data with the sharpest analytical minds, all supercharged by Synoptic AI, to deliver a clear, interconnected view of the entire value chain. Our trusted team of 2,700 experts across 30 countries breaks siloes and connects industries, markets and regions across the globe to empower our customers to identify risk sooner, spot opportunity faster and make every decision with complete confidence.

For more information, visit www.woodmac.com

Chris Boba
Wood Mackenzie
+44 7408 841129 
chris.boba@woodmac.com

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