The decade of cheap Henry Hub gas is coming to an end. Wood Mackenzie forecasts Henry Hub natural gas prices approaching US$5/million btu (real) by 2035, up from a nominal range of US$2 - 4/million btu that held for most of the past decade.

That stability underpinned the buildout of US LNG export infrastructure and the expansion of gas-fired power generation now supporting AI-driven data centre growth across the country. Wood Mackenzie’s report, Defying gravity: why US Henry Hub natural gas prices are set to rise, sets out why those conditions are no longer assured.

Two structural shifts are working in the same direction at once. Demand continues to grow at a sustained pace. Supply is becoming harder and more expensive to grow.

“The conditions that kept Henry Hub between US$2 - 4/million btu for the best part of a decade are no longer all operating at full force,” said Kristy Kramer, Head of LNG Strategy and Market Development at Wood Mackenzie. “Rapid play development, near-zero-cost associated gas, and year-on-year productivity gains drove that era of cheap, stable prices. Those tail winds have largely run their course. Power sector demand alone is calling for an additional 17 billion ft3/d by the mid-2030s, and the highest-quality acreage is already in production. Prices will need to rise to grow supply from here.”

The power sector is now the primary source of new US gas demand. Load growth from data centres and AI investment is set to add the equivalent of roughly half the gas demand of the entire existing power sector: an additional 17 billion ft3/d by the mid-2030s, a near-50% increase from 2025 levels Investment decisions for new US LNG export capacity reached a record high in 2025, with further projects reaching final investment decision in 2026. US LNG capacity is on track to more than double from current levels.

The US is forecast to account for more than one-third of global LNG supply in the early 2030s. Demand expansion is expected to continue into the 2040s.

As the power sector leans more heavily on gas to balance intermittent renewable generation, demand has become structurally more volatile. Henry Hub prices will reflect that.

US producers have spent years drilling their best acreage. As the highest-quality portions of Marcellus, Permian and Haynesville are developed, remaining inventory will be less productive and more geologically complex. Breakeven costs have stopped falling. Technology gains in mature plays are incremental rather than transformative.

"Associated gas accounted for roughly half of all US gas supply growth over the past decade at near-zero marginal cost. Over the next ten years, that share is expected to fall below 20%," said Dulles Wang, Director, Americas Gas and LNG Research at Wood Mackenzie. "With supply less responsive to price signals than it once was, prices will need to go higher and stay higher to bring new molecules to market, particularly from dedicated gas producers."

For upstream operators, LNG project developers and counterparties in long-term offtake negotiations, the price trajectory in this report is a direct input to investment decisions being made now. The shift in price formation at Henry Hub, from supply-driven to demand-driven, changes the risk calculus for any position exposed to US gas economics.

Henry Hub remains a localised benchmark, shaped by supply, demand and infrastructure conditions in southern Louisiana. This forecast does not imply uniform price movements across all US gas markets.

"The scale of the US LNG position may look like a commercial advantage," said Kramer. "But as the US moves past one-third of global LNG supply in the early 2030s, buyers are already asking questions about over-reliance on a single supply source. Those questions will only get louder."

Wood Mackenzie's forecast of rising Henry Hub prices has been a defining and contested position over the past 18 months, generating sustained debate among utilities, LNG buyers, upstream operators and financial institutions.

The Horizons report examines the principal risks to the forecast in both directions, including the potential for non-listed and internationally backed operators to accelerate supply, dormant or frontier plays to prove viable at scale, and a material slowdown in AI-driven power demand or global LNG trade growth.

Wood Mackenzie’s Horizons report, Defying gravity: why US Henry Hub natural gas prices are set to rise, is available to clients via Wood Mackenzie Lens.

Read the article online at: https://www.oilfieldtechnology.com/special-reports/02072026/wood-mackenzie-era-of-us2--4million-btu-henry-hub-natural-gas-prices-ending/

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