U.S. natural gas prices are set to rise through 2035, ending a decade of low Henry Hub prices, according to analysts at Wood Mackenzie. The firm points to surging demand from AI data centers and expanding U.S. LNG export infrastructure as key drivers.
For the decade ending 2025, Henry Hub prices held a narrow range of $2 to $4 per million British thermal units (MMBtu), reflecting a boom in domestic production. Operators ramped up output from standalone gas plays and associated gas from oil fields, keeping the market well supplied.
The inflection point comes as AI data centers, which require vast amounts of electricity, begin to compete with traditional industrial and residential consumption. Simultaneously, new LNG export facilities are expected to come online, tying domestic gas prices more closely to global markets.
Wood Mackenzie's forecast implies structural change for an industry long accustomed to price stability. The firm's analysis assumes sustained investment in both gas production and midstream capacity to meet the coming wave of demand.
Critics argue that renewable energy growth and rapid battery deployment could temper gas demand, especially if power markets shift more aggressively away from fossil fuels. The pace of AI buildout also remains uncertain, with some analysts questioning whether near-term hype outstrips actual power needs.