U.S. natural gas production is on track for a second straight record year, driven by data center power demand and rising LNG exports. The EIA forecasts further growth in 2027 and a lower Henry Hub price. Producers are consolidating, led by EQT's deal for Range Resources.
U.S. natural gas output is set to reach 112.2 billion cubic feet per day (bcfd) this year, up from 107.64 bcfd last year, according to the EIA's latest monthly estimates.
The EIA expects 116.13 bcfd in 2027, another record.
Data centers and LNG pull production higher
Demand is rising at home and abroad. Data centers have turned to additional gas-fired power generation to support the AI market, while U.S. LNG exports averaged 17.4 billion cubic feet per day in the first six months of the year, 23% higher than the same period in 2025.
Global demand for spot LNG cargoes is also surging in the absence of Qatar's gas due to the Iran war. At the same time, the EIA says more associated gas is coming from the Permian basin, and operators are boosting output in the Haynesville basin, which sits close to LNG export terminals.
Stronger output could lower Henry Hub prices
Higher production should more than offset higher LNG exports. As a result, the EIA's latest Short-Term Energy Outlook puts the 2027 Henry Hub spot price at $3.16 per million British thermal units, down 9% from 2026.
EQT and Range merge as producers scale up
Producers are responding with deals. EQT and Range Resources announced a definitive all-stock merger agreement that would create a company with a pro-forma enterprise value over $50 billion.
A day later, EQT raised its 2026 production guidance by about 90 Bcfe. Range, for its part, raised its third-quarter natural gas production by 11% from a year earlier.
Expand Energy, currently the largest U.S. natural gas producer before the deal is completed, said in its Q3 earnings release that it is positioning itself for structural domestic demand growth. According to Expand Energy: "A new era of demand-pull replaces historical supply-push dynamics across the U.S."
Source: Oilprice.com
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