We have lowered our natural gas price forecast due to the ripple effects of the Iran conflict. Last week East Daley Analytics outlined how the war has reshaped the US gas supply picture: Elevated crude prices mean more drilling in liquids-focused basins, and more associated gas growth. We have now locked those assumptions into our formal forecast.
The largest price revisions in the Macro Supply & Demand report begin in early 2027 and run through late 2028, when accelerating associated gas production growth pushes the forecast roughly $0.60/MMBtu lower than our prior outlook. Henry Hub prices do not rise above $4.50 until winter 2028–29 (see figure below).
There is upside risk to the summer 2028 and winter 2028–29 gas strips if the war ends early. By 2030, storage deficits return vs the 5-year average as domestic and LNG demand finally catch up to production.
Increased associated gas displaces growth from higher-cost basins. Anadarko production drops by about 750 MMcf/d and the Rockies by 250 MMcf/d in East Daley’s new outlook through 2030. The Permian adds nearly 1 Bcf/d of new supply, while growth from the Eagle Ford, ArkLaTex and Northeast balance the gas market at the margin.
The crude oil outlook is the other side to the story. We project Permian crude production grows 2.9% exit to exit in 2026 (+196 Mb/d), with cumulative growth of over 350 Mb/d through December 2030. Bakken growth accelerates as well, increasing 4.1% by YE26 (+51 Mb/d) and 6.7% in 2027 (+86 Mb/d). The Bakken then holds at a similar growth pace through 2030. Continental Resources is a producer to watch, stating recently that it will increase its capital budget and production across its positions in the Bakken and Permian.
In the Permian, takeaway capacity is the most likely constraint to growth. Current egress data in the Crude Hub Model shows roughly 267 Mb/d of available capacity to Corpus Christi, 278 Mb/d to Houston, and 636 Mb/d to Cushing (see figure at right). However, this forecast reflects the most recent data from a sub-$70/bbl WTI environment. With higher crude oil prices, we expect capacity into Corpus and Houston will tighten quickly.
The Corpus Christi corridor is already preparing for an expansion, with Enbridge’s (ENB) Gray Oak Pipeline finalizing a ~40 Mb/d expansion this month. East Daley sees the Plains All American-owned (PAA) Cactus pipelines as the most likely candidates to add capacity in the future.
The old adage says the cure for high prices is high prices. In this case, high oil prices may be the cure for high gas prices. – Oren Pilant and Keland Rumsey Tickers: ENB, PAA.
Download Part II of East Daley’s Permian Basin White Paper Series
The Permian Basin’s next big buildout is already taking shape, but this time the driver isn’t crude oil. In The Permian Basin at a Crossroads: Why This Pipeline Boom is Different, East Daley Analytics’ latest white paper reveals how gas demand from AI data centers, utilities and LNG exports is rewriting the midstream playbook in the leading US basin. Over 10 Bcf/d of new capacity and $12 billion in investments are reshaping flows, turning the Permian into a gas powerhouse even as rigs decline. Read Part II: Why This Pipeline Boom is Different
Meet Daley, the Best AI Tool in Energy
Meet Daley, the newest member of our energy team. Our new AI assistant is live and available to all East Daley Analytics clients. Early feedback has been phenomenal. Daley is platform-specific and only pulls from East Daley’s own proprietary data and content. It’s not open-source or generic AI, but built to understand our structure, language and analytics. Whether you’re looking for a specific metric, forecast or explanation, Daley can get you there quicker. — Reach out to learn more about Daley!
The Daley Note
Subscribe to The Daley Note for energy insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.