Why Natural Gas Prices Just Jumped — Even as Production Hits Records
U.S. natural gas futures rose 3.1% to $3.081 per mmBtu on August 12, 2026, lifted by warmer weather forecasts for the second week of August (WSJ). An mmBtu — million British thermal units — is simply the standard way natural gas is priced and traded. Spot prices, which are what buyers pay for gas delivered right now, also rose at most U.S. locations during the report week ending August 13, 2026 (EIA).
Natural gas stored for later use stood at 3,117 Bcf (billion cubic feet) as of July 31, 2026. That was an increase of 33 Bcf from the prior week, per EIA estimates (EIA). The EIA released its weekly storage report for the week of August 13, 2026 on August 13 (EIA). Here is the catch: storage builds have been running below the five-year average pace. Total additions during the injection season — the months when gas is stored up for winter — came to 1,914 Bcf, about 2% below the norm (EIA).
A 2% shortfall sounds small. But it matters when you consider what else is happening with supply and demand.
On the supply side, the United States was on track for record natural gas production in 2026, according to EIA's Today in Energy of August 12, 2026 (EIA). Preliminary dry gas production for May 2026 came in at 3,418 Bcf, or 110.3 Bcf per day (EIA).
So why isn't record production pushing prices down? The answer is exports. The EIA expects U.S. LNG (liquefied natural gas) exports to average 16.5 Bcf per day in the third quarter of 2026, down just 0.2 Bcf/d from the prior quarter (EIA). LNG is natural gas chilled into liquid form so it can be loaded onto ships and sold overseas. That 16.5 Bcf/day is a large, ongoing drain on U.S. supply that barely existed a decade ago. LNG exports have risen substantially every year from 2016 through 2022, and in 2022 they exceeded pipeline gas exports for the second year in a row (EIA).
Think of it like a bathtub. The faucet — U.S. production — is running at full blast. But a big drain — exports — is pulling water out at the same time. So even though production is at record levels, the tub isn't filling as fast as you'd expect. Now add warmer August weather, which means more gas is burned to run air conditioning, and you have three forces pushing prices up: lower storage, steady exports, and higher demand.
The 33 Bcf storage increase for the week ending July 31, 2026 is worth watching. When storage builds fall even 2% below normal during the injection season, it can tighten supplies for winter — especially if exports stay strong and weather drives up consumption. The EIA's next weekly report, for the week of August 13, 2026, will show whether storage is catching up or falling further behind.
For now, the market faces competing forces: record production on one side, below-average storage builds and strong export demand on the other. Spot prices rose at most locations through the report week ending August 13, which suggests the market is currently more concerned about storage and exports than it is comforted by high production.
