Global Energy Weekly: US nat gas waiting on Permian

Research evidence excerpt

Global Energy Weekly: US nat gas waiting on Permian

US nat gas waiting on Permian

Mild weather weighed on spring natural gas prices…

While the rest of the world has been dealing with geopolitical storms, weather was the

primary driver of US natural gas price volatility earlier this year. Winter storm Fern

boosted both heating demand and gas prices (see Fern flips the script for US natural

gas), but mild temperatures by late-February stuck around through April and weighed on

domestic natural gas prices. Even with the extreme Fern cold, YTD weather has been

milder than normal. Notably, the weather to gas price relationship has fallen apart

recently as May and June temperatures realized near normal levels (Exhibit 3) and natural

gas prices have bounced off their late-April lows (Exhibit 4).

Exhibit 3: The weather to gas price relationship has fallen apart Exhibit 4: …and natural gas prices have bounced off their late-April

recently as May and June temperatures realized near normal levels… lows

Estimated weather impact to US natural gas demand vs. normal, Bcf Henry Hub futures, $/mmbtu

200 8

5 0

-100 3

-200 Jan-25 Apr-25 Jul-25 Oct-25 Jan-26 Apr-26 Jul-26

Jan Feb Mar Apr May Jun Jul Prompt Cal 2027

Source: Bloomberg, BofA Global Research Source: Bloomberg

Note: July 2026 incorporates the current 15-day weather forecast BofA GLOBAL RESEARCH

BofA GLOBAL RESEARCH

…but tight balances drove Henry Hub off April lows…

Henry Hub monthly average cash prices realized higher YoY every month from January

2025 to January 2026, which in turn drove loose balances during this period. But since

February 2026, gas prices have averaged lower YoY and balances have flipped to tighter

YoY (Exhibit 5). In fact, we estimate that US gas balances have recently realized some of