The picture on the US natural gas market in May looks more supportive than bearish: the July/May Henry Hub benchmark held around $2.75–2.82/MMBtu, while the CME futures contract on May 19 traded at $3.111 with almost no daily change. At the same time, the EIA notes that LNG exports in 2026 continue to grow, and the latest Short-Term Energy Outlook forecasts average US LNG exports at around 17.0 Bcf/d in 2026.
Reuters also reported that prices in early May were supported by lower production and strong LNG exports.
Europe: storage remains the weak spot
For Europe, the key factor is the weak start to the injection season: according to GIE and European industry reviews, inventories entered 2026 significantly below last year’s levels, while as of April 1 the EU was only about 28% full, increasing the market’s sensitivity to weather conditions and LNG flows. The European Commission meanwhile confirmed the readiness of infrastructure to fill storage sites to at least 80% by November 1, but explicitly noted dependence on LNG availability. This is already reflected in spot and hub pricing through more nervous price action and increased attention to any supply disruptions.
Global backdrop: LNG is the key driver
From the perspective of the global balance, the market is entering a phase of supply growth, though not without risks: the IEA, in its Gas Market Report Q1-2026, noted that global demand growth in 2025 was below 1%, while acceleration is expected in 2026 amid new LNG supply, primarily from North America. This is an important point: the market is becoming more liquid, but Europe and Asia are simultaneously competing for additional cargoes, meaning any geopolitical disruption is quickly reflected in prices. Europe’s dependence on US LNG is becoming increasingly noticeable, while imports of Russian LNG into the EU, according to recent estimates, still remain a significant factor.
Near-term outlook
The baseline conclusion at the moment is that the medium-term backdrop is moderately bullish, although in the short term the market remains volatile due to weather conditions, storage injections, and LNG logistics news. As long as Henry Hub does not move sustainably above the $3.0/MMBtu zone, the market appears transitional — without a clear deficit, but also without a comfortable surplus. For trading, this means the most important factors right now are not “absolute” production levels, but rather the combination of US injection rates, weather patterns, and European LNG demand.
Failure by bulls to break above $3.00/MMBtu could trigger long liquidation; a breakout above this level would open the way toward $3.08–3.12/MMBtu.
As previously noted in Natural gas stabilizes as weather demand offsets oversupply concerns, the near-term outlook remains moderately positive.
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