The U.S. Energy Information Administration (EIA) has revised its Henry Hub natural gas price forecasts for 2025 and 2026, according to its latest Short-Term Energy Outlook (STEO) released recently.
The EIA now expects the Henry Hub spot price to average $4.19 per million British thermal units (MMBtu) in 2025 and $4.47 per MMBtu in 2026. This is an increase from its February forecast, which projected prices of $3.79 per MMBtu in 2025 and $4.16 per MMBtu in 2026.
The updated STEO also includes quarterly price projections. For 2025, the EIA expects the price to be $4.11 per MMBtu in the first quarter, $3.88 per MMBtu in the second quarter, $4.30 per MMBtu in the third quarter, and $4.49 per MMBtu in the fourth quarter. The following year, the price is expected to reach $4.66 per MMBtu in the first quarter, dip to $4.13 per MMBtu in the second quarter, then rise to $4.50 per MMBtu in the third quarter and $4.60 per MMBtu in the fourth quarter.
In the previous forecast, the EIA had predicted prices of $3.70 per MMBtu for the first quarter of 2025, $3.39 per MMBtu in the second quarter, $3.95 per MMBtu in the third quarter, and $4.11 per MMBtu in the fourth quarter. The agency also forecasted lower prices for 2026 compared to the new outlook.
The EIA cited stronger-than-expected natural gas consumption this winter, which led to higher-than-anticipated prices. “Consumption increased more than expected, pushing prices higher than forecasted,” the agency noted. For instance, the Henry Hub price averaged $4.19 per MMBtu in February, up from $4.13 in January. The first two months of the year saw prices exceed EIA’s October forecast by over $0.80 per MMBtu.
The report explained that unusually cold temperatures in January and February drove up natural gas consumption for space heating. This resulted in more gas being withdrawn from storage than initially estimated. “In total, 33 percent more gas was withdrawn from storage than expected,” the EIA stated. As a result, it expects working gas storage to be about 10 percent below the five-year average by March 31, the end of the winter season.
The EIA also noted that these stronger-than-expected withdrawals from storage are contributing to the price hikes. The agency raised its 2025 Henry Hub price forecast by 37 percent compared to October’s projection, bringing it to around $4.20 per MMBtu.
Looking ahead, the EIA expects global demand for liquefied natural gas (LNG) to drive further price increases. The agency forecasts that the Henry Hub price will average $4.50 per MMBtu in 2026, as LNG exports continue to rise. In December 2024, two new LNG export facilities, Plaquemines LNG Phase 1 and Corpus Christi Stage 3, began production. The EIA reported that Plaquemines LNG Phase 1 exported 1.1 billion cubic feet per day in February, operating at 85 percent of its capacity.
The EIA also acknowledged that the Federal Energy Regulatory Commission recently approved the expansion of Plaquemines LNG Phase 1, which could further impact the market. However, the timing of other LNG projects, such as Golden Pass and Plaquemines LNG Phase 2, remains uncertain.
Despite recent tariffs on U.S. LNG exports imposed by China, the EIA believes the impact on U.S. exports will be minimal. It noted that U.S. LNG cargoes are flexible in terms of destination and can be rerouted to other global markets.
In contrast, J.P. Morgan’s commodities research team forecasts lower prices. The bank predicts that the Henry Hub price will average $3.53 per MMBtu in 2025 and $3.23 per MMBtu in 2026. Similarly, Standard Chartered Bank expects prices to range between $3.20 and $3.70 per MMBtu in 2025 and 2026, with a general decline in prices through 2028.
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