New England Gas Prices Trade at Deep Discount to U.S

Natural gas prices at New England's Algonquin Citygate hub have been trading at a steep discount to the U.S. Benchmark Henry Hub. From April through July 2026, the Algonquin price averaged 43 cents per million British thermal units (MMBtu) below Henry Hub, according to data from Natural Gas Intelligence.

This marks the second-largest discount for that period since records began in 1999. The trend represents a shift from typical seasonal patterns where Algonquin prices often command a premium during high-demand winter months.

Supply Surge from Appalachia and Canada

Access to low-cost natural gas from the Appalachian region is a key factor keeping Algonquin prices low. Appalachia accounted for 31% of total U.S. Marketed natural gas production in 2025, more than any other region. Between April and July 2026, the average Appalachian regional hub price was 77 cents/MMBtu lower than Henry Hub, which is the second-widest discount ever reported.

Pipeline connections from Appalachia into the Northeast provide New England with this relatively inexpensive supply. Simultaneously, the region is receiving record-high volumes of natural gas imports from Canada. Data from S&P Global Energy shows monthly net flows from Canada into New England averaged a record 0.4 billion cubic feet per day from April through July 2026.

This import volume is more than 2.5 times the level seen during the same period in 2025.

Falling Regional Demand for Gas

The increase in supply has coincided with a drop in natural gas consumption within New England. Total natural gas consumption from April through July 2026 was 5% lower than during the same four-month span in 2025, according to S&P Global Energy.

Electricity generation, typically a major consumer of natural gas, saw a notable decline. Data from the U.S. Energy Information Administration's Hourly Electricity Grid Monitor shows natural gas-fired generation in New England decreased by 1.1 billion kilowatthours between April and July 2026 compared to the prior year. This represents a 6% drop.

Shift in Power Generation Mix

While gas-fired generation fell, output from renewable sources increased significantly. The EIA data indicates wind generation rose by 0.7 billion kilowatthours, a 59% increase compared to the April-July period in 2025. Utility-scale solar generation also grew, increasing by 0.2 billion kilowatthours, or 29%.

The following table compares the changes in New England's electricity generation mix between April-July 2026 and the same period in 2025:

This shift in the generation mix contributed to reduced demand for natural gas in the power sector. The combination of strong, low-cost supply and weakening demand has sustained the deep price discount at the Algonquin Citygate trading point.