The U.S. Energy Information Administration (EIA) increased its Henry Hub spot price forecast for 2025 and 2026 in its latest short term energy outlook (STEO), which was released recently.
According to the STEO, the EIA now sees the Henry Hub spot price averaging $4.19 per million British thermal units (MMBtu) in 2025 and $4.47 per MMBtu in 2026. In its previous STEO, which was released in February, the EIA projected that the Henry Hub spot price would average $3.79 per MMBtu in 2025 and $4.16 per MMBtu in 2026.
The EIA’s latest STEO projected that the Henry Hub spot price will come in at $4.11 per MMBtu in the first quarter of 2025, $3.88 per MMBtu in the second quarter, $4.30 per MMBtu in the third quarter, $4.49 per MMBtu in the fourth quarter, $4.66 per MMBtu in the first quarter of next year, $4.13 per MMBtu in the second quarter, $4.50 per MMBtu in the third quarter, and $4.60 per MMBtu in the fourth quarter.
In its previous STEO, the EIA forecast that the Henry Hub spot price would average $3.70 per MMBtu in the first quarter of this year, $3.39 per MMBtu in the second quarter, $3.95 per MMBtu in the third quarter, $4.11 per MMBtu in the fourth quarter, $4.26 per MMBtu in the first quarter of next year, $3.81 per MMBtu in the second quarter, $4.21 per MMBtu in the third quarter, and $4.35 per MMBtu in the fourth quarter of 2026.
“U.S. natural gas prices have been higher this winter than we forecast in our Winter Fuels Outlook, included in our October 2024 STEO, as consumption increased more than expected,” the EIA said in its latest STEO.
In its March STEO, the EIA noted that the Henry Hub spot price averaged $4.19 per MMBtu in February, which it pointed out was up from the January average of $4.13 per MMBtu.
“The average price for the first two months of this year was more than $0.80 per MMBtu higher than we forecast in October,” the EIA said in its March STEO.
“Below-normal temperatures in both January and February led to increased consumption of natural gas to meet space heating demand, which resulted in more natural gas being withdrawn from underground storage than estimated in the October STEO,” it added.
“In January and February combined, 33 percent more natural gas was withdrawn from storage than we had expected in the October forecast. In our current forecast, we expect natural gas inventories in working gas storage to be about 10 percent lower than the five-year average at the end of the winter season (November–March) on March 31,” it continued.
“Because of the stronger than expected storage withdrawals in January and February, we now expect there will be less natural gas in storage for the rest of this year, which has led us to raise our natural gas price forecast,” it went on to state.
“The Henry Hub price in this STEO averages around $4.20 per MMBtu in 2025, which is 37 percent higher than we forecast in October,” the EIA highlighted.
In its latest STEO, the EIA said it expects the Henry Hub natural gas price to average $4.50 per MMBtu in 2026 as global demand for liquefied natural gas grows.
“Two new LNG export facilities – Plaquemines LNG Phase 1 and Corpus Christi Stage 3 – started LNG production in December 2024,” the EIA pointed out in its March STEO.
“We estimate that exports from Plaquemines LNG Phase 1 averaged 1.1 billion cubic feet per day (Bcfpd) in February, indicating that the facility operated at 85 percent of its nominal capacity that month,” it added.
“On February 27, the facility received approval from the Federal Energy Regulatory Commission to begin liquefaction activities to the ninth and final block of Phase 1,” it noted.
“The start-up timing over the next two years of two additional projects – Golden Pass and Plaquemines LNG Phase 2 – is a source of uncertainty in our forecast,” the EIA went on to state.
The EIA also said in its latest STEO that it expects “China’s imposition of tariffs on U.S. LNG that were enacted in early February to have little to no effect on U.S. LNG exports because destination-flexible U.S. LNG cargoes can be routed to other global markets”.
In a research note sent to Rigzone by the JPM Commodities Research team on Friday, J.P. Morgan projected that the U.S. Natural Gas Henry Hub price will average $3.53 per MMBtu in 2025 and $3.23 per MMBtu in 2026.
In that note, J.P. Morgan forecast that the commodity will average $3.55 per MMBtu in the first quarter of this year, $3.75 per MMBtu in the second quarter, $3.45 per MMBtu in the third quarter, $3.35 per MMBtu in the fourth quarter, $3.50 per MMBtu in the first quarter of 2026, $3.00 per MMBtu in the second quarter, $3.15 per MMBtu in the third quarter, and $3.23 per MMBtu in the fourth quarter of 2026.
A report sent to Rigzone by Standard Chartered Bank Commodities Research Head Paul Horsnell on March 11 projected that the NYMEX basis Henry Hub nearby future U.S. natural gas price will average $3.20 per MMBtu in the first quarter of 2025, $3.50 per MMBtu across the second and third quarters, $3.20 per MMBtu across the fourth quarter of 2025 and first quarter of 2026, and $3.70 per MMBtu in the second quarter of next year.
That report forecast that the NYMEX basis Henry Hub nearby future U.S. natural gas price will come in at $3.30 per MMBtu overall in 2026, $2.90 per MMBtu overall in 2027, and $3.13 per MMBtu overall in 2028.
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