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U.S. natural gas production hits record high as Permian pipelines open

U.S. natural gas production hits record high as Permian pipelines open

Built World

Gross withdrawals reached 137 billion cubic feet per day in July as new pipelines clear the way to LNG export terminals.

October 2nd, 2026: EIA announces July production record

Overview

Updated Oct 19

U.S. natural gas production set a record in July 2026, with gross withdrawals reaching 137 billion cubic feet per day. It was the first monthly high of 2026, after five in 2025, and new Permian pipelines carrying gas to Gulf Coast export terminals drove the gain.

Since then supply has eased. LSEG put Lower 48 output at 111.5 billion cubic feet per day so far in October, down from record highs of 113.3 in August and September, after pipeline outages in Kentucky, Texas and West Virginia. November futures trade near $3.17 per million Btu, and the December-over-November premium fell to a record-low 29 cents, a sign traders see no winter squeeze.

Why it matters

Record supply and a calm winter futures market keep U.S. heating and power bills low, even as pipeline outages trim output.

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Key Indicators

137 Bcf/d
Record July 2026 gross withdrawals
Total gas pulled from all U.S. wells in July 2026, an all-time high.
~5x
Oil-to-gas energy-equivalent price ratio
Crude at $92.21 per barrel vs gas at $3.09 per million Btu, on an energy basis.
79 Bcf
Storage above five-year average on Sept 25
Working gas in storage totaled 3,415 Bcf after a 64 Bcf weekly injection.
111.5 Bcf/d
Lower 48 output so far in October
Down from record 113.3 Bcf/d in August and September, per LSEG, after pipeline outages.

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Organizations Involved

U.S. Energy Information Administration
U.S. Energy Information Administration
Federal statistics agency
Reporting agency

The statistical arm of the U.S. Energy Department that publishes the Natural Gas Monthly.

Timeline

December 2025 October 2026

6 events Latest: October 2nd, 2026 · 1 month ago
Tap a bar to jump to that date

  1. EIA announces July production record

    Latest Report

    Today in Energy published the record 137 Bcf/d figure from the Natural Gas Monthly, noting new pipelines eased bottlenecks.

  2. October output slips from summer record

    Supply

    LSEG put average Lower 48 gas output at 111.5 Bcf/d in October, below record 113.3 Bcf/d in August and September, after pipeline problems in Kentucky, Texas and West Virginia. November futures rose about 1.6% to $3.165 per million Btu.

  3. Storage sits 79 Bcf above five-year average

    Supply

    Working gas in storage reached 3,415 Bcf after a 64 Bcf weekly injection, ahead of the heating season.

  4. Hugh Brinson Pipeline starts flows

    Infrastructure

    The pipeline began interstate flows ahead of schedule during summer 2026, adding takeaway capacity from the Permian to Gulf Coast LNG terminals.

  5. Gross withdrawals hit record 137 Bcf/d

    Production

    July set the first monthly record of 2026, led by new Permian wells in Texas and New Mexico.

  6. Five monthly records set in 2025

    Production

    Gross withdrawals hit new monthly highs in five separate months of 2025 as gas prices and well productivity rose.

Scenarios

1

Permian gas keeps climbing to fresh records

Likely Resolves by Feb 1, 2027

Discussed by: EIA cites new wells and pipeline takeaway; The Company Chronicle notes Permian output grows on oil drilling economics

Associated gas from oil wells keeps rising as the basin matures, and new Gulf Coast pipeline capacity clears a path to LNG export terminals. If another pipeline or terminal expansion comes online, gross withdrawals push past 137 Bcf/d in a later month of 2026.

2

Record supply pins winter gas prices below the norm

Likely Resolves by Apr 30, 2027

Discussed by: The Company Chronicle and the EIA storage report, showing supply 79 Bcf above the five-year average

Storage is comfortable and production sits at records, so winter heating demand may not be enough to spike prices. Henry Hub stays restrained even during January cold snaps.

3

Pipeline and export constraints return, growth stalls

Possible Resolves by Jul 1, 2027

Discussed by: EIA names takeaway capacity as the key variable supporting continued production growth

Growth depends on Gulf Coast LNG terminals taking more gas, plus new pipe to reach them. Any delay in terminal or pipeline schedules could cap production and widen the gap between record output and what can actually be exported.

4

Winter cold fails to lift gas out of the $3 range

Likely Resolves by End of 2026

Discussed by: LSEG output estimates and NYMEX futures, as reported by Business Recorder; EIA storage data

Storage sits above the five-year average and the December contract's premium over November fell to a record low of about 29 cents per million Btu, so traders see ample supply for heating season. Cold snaps could tighten the market, but a mild winter leaves Henry Hub near $3.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

2008–2012

Marcellus Shale gas boom (2008–2012)

Hydraulic fracturing opened the Marcellus formation under Pennsylvania and West Virginia, which went from negligible output to about a third of U.S. production in a few years. Supply flooded the market and dragged Henry Hub below $2 per million Btu in 2012.

Then

A gas glut cut prices sharply and squeezed producers who had hedged on higher revenue.

Now

Cheap gas drove a coal-to-gas switch in power generation and built the case for LNG export terminals.

Why this matters now

The same pattern is repeating: shale drilling plus pipeline buildout creates supply that outpaces domestic demand, pushing prices down and pushing exports up.

2018–2019

Permian oil pipeline bottleneck (2018–2019)

Permian oil pipelines filled to capacity, so West Texas crude sold at steep discounts to the Gulf Coast benchmark. Producers shut wells or flared gas they could not move until new takeaway pipelines arrived in 2019.

Then

The bottleneck capped Permian output and hammered regional prices for about two years.

Now

New pipeline capacity unleashed another wave of production growth once the pipe arrived.

Why this matters now

Infrastructure, not geology, set the ceiling on Permian output then. The same variable now determines how much gas can reach Gulf Coast LNG terminals.

February 2016

Sabine Pass opens, U.S. becomes a gas exporter (2016)

The first large-scale U.S. LNG export terminal began cargoes from Louisiana, tying domestic Henry Hub gas prices to overseas demand for the first time.

Then

Exports grew steadily year over year as more terminals came online.

Now

The U.S. became a leading LNG exporter, creating the demand pull that now makes record Permian output worth extracting.

Why this matters now

Gulf Coast LNG terminals are the destination for the gas flowing through the new pipelines that drove July's record.

Sources

(6)
+1
U.S. Energy Information Administration The Company Chronicle Energy Intelligence Headlines Briefing / WSJ Markets Business Recorder / Reuters U.S. Energy Information Administration