The hottest July on record, and summer gas was 6% cheaper
Serguey Asael Shinder2 min readThe Henry Hub natural gas spot price averaged $2.93 per million British thermal units from June through August 2026 - 6% below the same months last year - and it did so through the hottest July the Lower 48 has recorded. The average temperature was 77°F, a monthly record according to NOAA, with the air-conditioning load that implies. EIA published the numbers on 25 September; the principal contributor is Andrew Iraola.
The generation arithmetic is the reason. Against the same period in 2025, EIA's latest Short-Term Energy Outlook estimates solar generation up 19.4 billion kilowatthours and wind up 9.3 BkWh, while gas-fired generation rose 7.5 BkWh. Renewables took on roughly four fifths of the incremental summer output.
Supply did the rest. US dry gas production has set repeated monthly records in 2026 and the September STEO puts the year on course for 111.2 Bcf/d, a record; June-August output ran 2% (2.7 Bcf/d) above last year, led by the Permian. Storage entered the injection season in April at 1,906 Bcf, 4% above the prior five-year average, and monthly injections beat their five-year averages in every month through August except May. EIA's August STEO forecast 3,985 Bcf of Lower 48 working inventories at the end of October - 5% above the five-year average. Maintenance at LNG terminals also held back export demand growth.
What it means
This is the cleanest natural experiment the US gas market has offered in years. Demand got the shock everyone models for - a record-hot month across the whole Lower 48 - and the price went down. Every buffer that could absorb it did: record production, above-average storage entering the season, strong injections through the season, soft LNG offtake, and 28.7 BkWh of new wind and solar output that never asked for a molecule.
The renewables figure deserves to be read as a gas-market number rather than a clean-energy one. Gas-fired generation still grew, so nothing was displaced in absolute terms; what changed is the share of the increment. In a summer where gas had to cover all of the additional cooling load, the same weather would have drawn far harder on production and storage, and $2.93 would not have held. That is the mechanism by which renewable build-out shows up in a price series - not as lower demand, but as a smaller call on the marginal supplier during the exact weeks when the marginal supplier is expensive.
The cushion is the thing to carry into winter. 3,985 Bcf forecast for end-October at 5% above the five-year average is a comfortable starting position, and the reason to note it now is that a warm-summer, high-storage entry into heating season is precisely when the market stops pricing weather risk. The asymmetry has not gone anywhere: production records are a supply story, and January is a demand story.