The U.S. Energy Information Administration (EIA) has published its latest forecasts for Henry Hub natural gas prices in its October Short-Term Energy Outlook (STEO). The report reveals expected average prices for this year and the next.
For 2024, the EIA predicts that the Henry Hub spot price will average $2.28 per million British thermal units (MMBtu) and will rise to $3.06 per MMBtu in 2025. In September’s STEO, the EIA had projected averages of $2.19 per MMBtu for 2023 and $3.14 per MMBtu for 2024.
The October STEO outlines specific quarterly averages for the Henry Hub spot price: $2.81 per MMBtu in the fourth quarter of 2024, $3.16 per MMBtu in the first quarter of 2025, $2.59 per MMBtu in the second quarter, $3.13 per MMBtu in the third quarter, and $3.35 per MMBtu in the fourth quarter.
In comparison, the September STEO had estimated the average Henry Hub spot price at $2.52 per MMBtu for the fourth quarter of 2023, $3.01 per MMBtu for the first quarter of 2024, $2.90 for the second quarter, $3.28 for the third quarter, and $3.36 for the fourth quarter of 2024.
The EIA’s October STEO also reported that the average Henry Hub spot price for 2023 is now set at $2.54 per MMBtu.
According to the EIA, natural gas prices increased in September due to a slight drop in production. The average price for Henry Hub in September was $2.28 per MMBtu, a 15% rise from the August average of $1.98 per MMBtu. This production decline was partly attributed to an 11% decrease in Gulf of Mexico (GOM) production.
The EIA explained that around 53% of GOM production capacity was offline due to Hurricane Francine, which struck the Louisiana coast on September 11. The capacity did not return to normal levels because Category 4 Hurricane Helene impacted a nearby area two weeks later, causing further disruption to energy systems.
Looking ahead, the EIA expects natural gas prices to rise in 2025 as liquefied natural gas (LNG) exports increase, while domestic consumption and production remain steady. The agency forecasts that U.S. natural gas consumption will average 89 billion cubic feet per day in 2025, similar to its forecast for 2024.
However, LNG exports are expected to rise by nearly two billion cubic feet per day next year due to strong international demand and expanding export capacity.
In response to the hurricanes, the Bureau of Safety and Environmental Enforcement (BSEE) activated its hurricane response team. The activation was noted in statements released on September 10 and September 24 regarding Hurricanes Francine and Helene.
Additionally, Standard Chartered’s Commodities Research Head Paul Horsnell reported that the NYMEX basis Henry Hub natural gas price is projected to average $2.70 per MMBtu in the fourth quarter of this year, $3.20 in the first quarter of next year, and $3.50 in both the second and third quarters, dropping to $2.80 in the fourth quarter of 2025.
Meanwhile, a note from J.P. Morgan’s Commodities Research team, shared with Rigzone on September 30, forecasted an average Henry Hub price of $2.33 per MMBtu in 2024 and $3.70 per MMBtu in 2025. This report indicated that prices would average $2.75 in the fourth quarter of 2024, $3.75 in the first quarter of 2025, $3.30 in the second quarter, $3.75 in the third quarter, and rise to $4.00 in the fourth quarter.
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