EIA: California Natural Gas Prices Fall to Record Lows Through May

DAVENPORT, FL (DTN) – California natural gas spot prices fell to record lows during the first five months of 2026 as elevated regional inventories and weaker demand from the power sector pushed prices below the national benchmark, according to analysis released Tuesday (6/2) by the U.S. Energy Information Administration.

Monthly average prices at Northern California’s PG&E Citygate and Southern California’s SoCal Border Average dropped to their lowest levels on record, while SoCal Citygate prices also moved near historic lows.

The decline comes as natural gas inventories in the Pacific region remained well above historical levels. EIA data showed regional storage inventories were 30.9% above the five-year average, or 69 billion cubic feet higher, for the week ended May 22.

At the same time, lower natural gas consumption from California’s power sector continued to pressure prices. Increased renewable generation and growing battery storage capacity reduced the need for natural gas-fired generation, particularly during evening peak demand periods.

According to EIA, California consumed a record-low 4.8 billion cubic feet per day of natural gas in 2025, down 7% from the previous year.

Historically, California natural gas hubs trade at a premium to Henry Hub because of regional supply constraints and infrastructure limitations. However, the combination of stronger inventories and softer demand resulted in California hub prices averaging below Henry Hub through the first five months of 2026.