Natural Gas Prices Explained: Henry Hub, LNG and Winter Demand
Natural gas heats homes, runs power plants and is shipped worldwide as LNG. Its price can double in a cold snap. Here is how the US benchmark works and what moves it.
Key takeaways
- The US benchmark is Henry Hub, a pipeline hub in Louisiana. Prices are quoted in dollars per million British thermal units (MMBtu).
- Weather is the biggest short-term driver: cold winters and hot summers raise demand.
- Weekly storage reports, every Thursday, often move the market.
- LNG exports tie US prices more closely to Europe and Asia than in the past.
Henry Hub and the unit
Henry Hub in Erath, Louisiana, connects many interstate and intrastate pipelines. The NYMEX natural gas futures contract, the most traded gas contract in the world, is priced for delivery there. Each contract covers 10,000 MMBtu. An MMBtu is a measure of energy, roughly the amount in 1,000 cubic feet of gas.
What moves natural gas prices
Weather
Nearly half of US homes use gas for heating. A cold snap can send demand and prices soaring within days. In summer, heat waves raise demand from power plants running air conditioning. Forecasts for the next two weeks are watched closely.
Storage
The US injects gas into underground storage from about April to October and withdraws it in winter. Every Thursday at 10:30 a.m. Eastern, the EIA publishes its Weekly Natural Gas Storage Report. A smaller-than-expected injection or a larger-than-expected withdrawal tends to push prices up.
Production
Shale fields such as the Appalachian Basin (Marcellus and Utica) and the Permian supply most US gas. Much Permian gas comes as a by-product of oil drilling, so oil prices affect gas supply too.
LNG exports
The US has become one of the world's largest exporters of liquefied natural gas. When Europe or Asia pays high prices, more US gas is shipped abroad, which can support Henry Hub prices.
The 2026 global angle
Normally about one-fifth of world LNG trade passes through the Strait of Hormuz, mostly from Qatar. With that route disrupted in 2026, buyers in Europe and Asia have competed harder for other supplies, including US cargoes. That has pulled more attention to US export capacity and to how much gas stays home for winter.
Why it matters to you
- Heating bills: utilities pass gas costs to customers, often with a lag.
- Electricity prices: gas is the largest source of US power generation.
- Inflation: energy services feed into the CPI report.
Watch natural gas futures live on our oil and energy page.
This article is general education, not personalized financial advice. Read our editorial policy and disclaimer.
