Natural Gas Prices Fall 28% Amid High Storage Levels
Lower commodity prices provide cost relief, but business owners should watch for infrastructure-driven power demand impacts.
Updated on Oct. 23, 2026 in Oil and Gas
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Natural gas prices have fallen 28% year-to-date, with the November contract dropping to $2.65 per million British thermal units. Despite lower prices, midstream operators are reporting record throughput and financial results driven by rising demand from data centers.
Why it matters
Operators face a decoupled market where low commodity prices contrast with rising infrastructure throughput. Increased oil drilling produces significant associated gas, forcing pipeline networks to move record volumes to accommodate both output and surging electricity demand from AI data centers.
Natural gas storage is currently 3,644 billion cubic feet, exceeding the historical five-year average of 3,609 billion cubic feet. Meanwhile, Kinder Morgan reported third-quarter adjusted earnings of 35 cents per share, a 21% increase year-over-year.
The players
Kinder Morgan
A major midstream energy company operating an extensive network of pipelines and storage assets that connect shale basins to consumption markets.
The details
Midstream operators generate stable revenue through transport and processing fees regardless of commodity price volatility. Because 37% of 2024 U.S. gas production was a byproduct of oil drilling, infrastructure owners are moving excess supply even as prices remain compressed. High pipeline utilization is further sustained by electricity demand from industrial hubs and AI data centers, insulating operators from upstream price swings.
Timeline
37% of 2024 U.S. gas production originated as a byproduct of oil drilling.
Storage levels increased by 77 billion cubic feet in the week ending October 16, 2026.
The November 2026 natural gas contract price fell to $2.65 per million British thermal units.
Market Landscape
This performance follows the established trend of associated gas production, where 37% of total U.S. supply in 2024 emerged as a byproduct of shale oil drilling. Midstream operators are now leveraging this supply to meet industrial energy demand, departing from traditional reliance on pure-play gas drilling cycles.
Businesses should monitor their energy cost exposure, as lower contract pricing may not immediately translate to reduced utility bills due to higher midstream transport volumes. Owners should factor in rising infrastructure throughput as an indicator of sustained industrial and data center power demand.
The takeaway
Operators should track pipeline throughput figures as a proxy for localized industrial energy demand rather than focusing solely on spot gas prices. Review current power procurement contracts to see if energy providers are passing through transportation fee hikes associated with high-volume pipeline usage.
Further reading
For more insight into the shifting energy infrastructure sector, explore our Oil and Gas section.
Source note: This article includes information reported by CNBC.
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