Transmission Why Natural Gas Prices In The US Just Jumped 70% (Energy Flux)
Feb 5, 2026
Seb Kennedy, founder of Energy Flux and gas markets analyst, breaks down the January 2026 gas chaos. He unpacks short squeeze mechanics in European hubs. He explains US freeze-offs that sent Henry Hub soaring. He examines LNG export limits, geopolitical twists from Venezuela to Panama, and Pakistan’s solar surge versus LNG commitments.
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A Global LNG Glut Is Coming
- A large global LNG buildout is underway and will create a significant glut by late decade.
- Forecasts show liquefaction capacity could rise ~50%, weakening long-term price support.
LNG Ramp-Up Compresses Producer Margins
- Rising US supply depresses destination prices while Henry Hub sets a rising cost base, compressing LNG margins.
- That cannibalisation makes some US-to-Europe flows uneconomic at times.
Finance LNG With Long-Term Offtakes
- Structure LNG financing around long-term offtake contracts to avoid market-risk exposure for projects.
- Banks require buyers to carry liquidity risk so projects can reach FID and secure financing.