Roth cuts gas stocks as oversupply threatens natural gas prices into 2026

Roth Capital Partners forecasts a weakening U.S. natural gas market through 2026 due to persistent oversupply, projecting Henry Hub prices to average $3.25 per MMBtu in 2026, significantly below current futures. This outlook, driven by robust production growth outpacing strong demand, led Roth to downgrade several gas-focused exploration and production companies, including Antero Resources and EQT, to 'neutral' or 'sell.' The brokerage anticipates gas equities will remain range-bound until supply growth decelerates, with potential global LNG oversupply by 2027 further capping U.S. export demand.

Analysis

Roth Capital Partners has issued a bearish outlook for the U.S. natural gas market, forecasting sustained price weakness through 2026 due to structural oversupply. The firm's analysis indicates that production has climbed to 109-110 billion cubic feet per day (Bcf/d), pushing domestic storage 196 Bcf above the five-year average and creating oversupplied conditions. Despite anticipating one of the strongest demand growth years in 2025 (+4.5 Bcf/d), Roth projects that supply growth will continue to cap prices, with a forecast of 110-111 Bcf/d in 2026. This leads to their Henry Hub price projection of $3.25 per million British thermal units (MMBtu) for 2026, which is notably below the current futures curve of approximately $3.85. Consequently, Roth has downgraded several gas-focused exploration and production companies, cutting Antero Resources, EQT, EXE, CNX Resources, and Range Resources to “neutral” from “buy,” and, more severely, downgrading Comstock Resources to “sell” from “neutral.” The report suggests gas equities will likely remain range-bound until supply growth decelerates, with the added long-term headwind of a potential global LNG market surplus by 2027.

Key Decisions for Investors

• Investors should exercise caution on long positions in U.S. natural gas producers, as equities are expected to remain range-bound until there is clear evidence of a slowdown in supply growth.
• The significant discrepancy between Roth's $3.25/MMBtu price forecast and the ~$3.85 futures curve for 2026 suggests potential downside risk for companies whose valuations are predicated on higher long-term prices.
• Holders of the downgraded stocks should reassess their positions, paying particular attention to Comstock Resources (CRK) given its specific 'sell' rating, which signals a more pronounced negative outlook compared to its peers.
• Monitor upstream production data and weekly storage reports for any signs of supply discipline, as a material reduction in drilling activity or an unexpected demand surge would be the primary catalysts to challenge this bearish thesis.