Appalachian and Canadian natural gas supplies combined with lower-than-usual regional consumption have pushed New England natural gas prices near record discounts to Henry Hub.
Low-cost Appalachian and Canadian natural gas supplies, combined with below-average regional consumption, have driven down natural gas prices at a major New England pricing hub in recent months, pushing them to trade at a significant discount to the widely cited U.S. benchmark, Henry Hub. According to Natural Gas Intelligence data dating back to 1999, natural gas prices at Algonquin Citygate averaged 43 cents per million British thermal units (MMBtu) less than Henry Hub from April through July 2026, marking the second-largest discount for that period on record.
Historically, Algonquin Citygate prices have traded at a premium to Henry Hub during winter months as residential heating demand rises. In contrast, spring and summer typically see reduced heating demand alongside increased solar generation, which suppresses natural gas consumption and often results in Algonquin trading at a discount to Henry Hub.
Springtime prices have remained relatively low largely due to steady access to low-cost Appalachian natural gas. In 2025, Appalachia accounted for 31% of total U.S. marketed natural gas production, surpassing any other region. Between April and July 2026, the Appalachia Regional average hub price traded 77 cents/MMBtu below Henry Hub, representing the second-widest discount ever recorded. Dedicated pipeline connections from Appalachia into the Northeast continue to provide New England with reliable access to this competitively priced supply.
New England is also receiving record volumes of natural gas imports from Canada this year. Data from S&P Global Energy shows that monthly net flows from Canada into the region averaged a record 0.4 billion cubic feet per day (Bcf/d) from April through July, more than 2.5 times the volume recorded during the same period in 2025.
The surge in regional supply coincided with a notable decline in local demand. Total natural gas consumption in New England from April through July 2026 was 5% lower than in the same period of 2025, according to S&P Global Energy. As electricity generation remains one of the largest consumers of natural gas, shifts in the power mix directly impact demand. Between April and July, New England’s natural gas-fired electricity generation fell by 1.1 billion kilowatthours (BkWh), or 6%, compared to 2025, according to the EIA’s Hourly Electricity Grid Monitor. During the same timeframe, wind generation rose by 0.7 BkWh (59%), while utility-scale solar output increased by 0.2 BkWh (29%).
Principal contributor: Andrew Iraola