Bank of America Raises 2026 U.S. Natural Gas Price Forecast on Tight Supply Outlook
Summary Points
- Bank of America sees tighter U.S. gas balances heading into winter 2026.
- Henry Hub forecast raised to $3.80/MMBtu for second-half 2026.
- LNG export demand and power-sector use are key price supports.
- Canadian pipeline imports have declined, adding to market tightness.
- U.S. production remains below late-2025 highs despite recent gains.
Bank of America Lifts 2026 Natural Gas Forecast to $3.80 on Tighter Market
Bank of America has increased its forecast for U.S. natural gas prices in the second half of 2026, citing tightening supply conditions and rising demand that could draw down inventories ahead of winter.
What Readers Should Know
- Bank of America raised its second-half 2026 Henry Hub forecast to $3.80/MMBtu from $3.60.
- The 2027 price outlook remains unchanged at $4.00/MMBtu.
- Tighter supply stems from strong LNG and power-sector demand.
- Lower Canadian pipeline imports are also supporting the market.
- Domestic production remains below late-2025 peaks.
Montreal (Oil Monster): Bank of America has increased its forecast for U.S. natural gas prices in the second half of 2026. According to the bank, tightening supply conditions and growing demand could result in lower inventory levels ahead of the upcoming winter heating season.
The bank now expects the Henry Hub benchmark to average $3.80 per million British thermal units (MMBtu) during the second half of the year, up from its previous estimate of $3.60/MMBtu. However, it kept its 2027 price outlook unchanged at $4.00/MMBtu.
Also Read: EIA Raises Henry Hub Natural Gas Price Forecasts for 2026 and 2027 Amid Strong Demand Outlook
Why Prices Moved
Although U.S. natural gas production continues to rise, much of the additional supply has been absorbed by stronger consumption from liquefied natural gas (LNG) export facilities and the power generation sector. Lower pipeline imports from Canada have also contributed to a tighter market.
LNG Demand Driving the Outlook
The revised forecast is mainly driven by rising LNG demand. The bank noted that feedgas deliveries to U.S. export terminals during the second quarter of 2026 were significantly higher than a year earlier. Bank of America expects demand to increase further as new LNG facilities begin operations over the next 18 months.
Power Sector and Production Trends
Meanwhile, natural gas-fired power plants have gained market share from coal following the decline in gas prices earlier this year. Domestic production continues to remain below the peak recorded in late 2025. The bank expects firmer natural gas prices in the coming months.
Frequently Asked Questions
What is Bank of America’s 2026 natural gas price forecast?
Bank of America expects Henry Hub to average $3.80/MMBtu in the second half of 2026, up from its prior $3.60/MMBtu estimate.
What is the 2027 natural gas price outlook?
The bank kept its 2027 forecast unchanged at $4.00/MMBtu.
Why is the natural gas market tightening?
Stronger LNG export demand, higher power-sector consumption, and lower Canadian pipeline imports are absorbing additional U.S. supply.
How is LNG demand affecting prices?
Feedgas deliveries to U.S. export terminals were significantly higher in Q2 2026 than a year earlier, with more demand expected as new facilities come online.
What is happening with U.S. natural gas production?
Production is rising but remains below the peak recorded in late 2025, while gas-fired power plants are gaining share from coal.