The U.S. Energy Information Administration (EIA) has revealed its latest average Henry Hub natural gas spot price forecasts in its August short term energy outlook (STEO), which was released on August 12.
According to that STEO, the EIA sees the Henry Hub spot price averaging $3.61 per million British thermal units (MMBtu) in 2025 and $4.34 per MMBtu in 2026. The EIA’s previous July STEO projected that the Henry Hub spot price would average $3.67 per MMBtu this year and $4.41 per MMBtu next year. Both STEOs highlighted that the 2024 Henry Hub spot price averaged $2.19 per MMBtu.
A quarterly breakdown included in the EIA’s latest STEO showed that the EIA is forecasting that the Henry Hub spot price will come in at $3.25 per MMBtu in the third quarter of 2025, $3.87 per MMBtu in the fourth quarter, $4.35 per MMBtu in the first quarter of 2026, $3.69 per MMBtu in the second quarter, $4.29 per MMBtu in the third quarter, and $5.01 per MMBtu in the fourth quarter of 2026.
In its previous July STEO, the EIA projected that the Henry Hub natural gas spot price would average $3.37 per MMBtu in the third quarter of this year, $3.99 per MMBtu in the fourth quarter, $4.46 per MMBtu in the first quarter of next year, $3.76 per MMBtu in the second quarter, $4.35 per MMBtu in the third quarter, and $5.06 per MMBtu in the fourth quarter.
Both STEOs pointed out that the first quarter 2025 Henry Hub spot price averaged $4.15 per MMBtu and that the second quarter Henry Hub spot price came in at $3.19 per MMBtu.
“U.S. natural gas prices have been lower this year than we forecasted in previous STEOs earlier this year, with high volumes of natural gas put into storage so far this injection season (April-October),” the EIA said in its latest STEO.
“Although we expect natural gas prices to be generally lower than we were forecasting a few months ago, we still expect prices to rise from current levels, driven by tighter market balances,” it added.
In its August STEO, the EIA noted that the U.S. benchmark Henry Hub spot price averaged almost $3.20 per MMBtu from April through July, which it pointed out was $0.80 per MMBtu below the April STEO forecast.
“In our April STEO, we expected natural gas inventories in working gas storage to be three percent less than the five-year average at the end of the injection season on October 31,” the EIA said in its latest STEO.
“We now expect it to be about two percent higher than the five-year average. Our higher end of season storage forecast is largely the result of more natural gas production and fewer liquefied natural gas (LNG) exports than we had expected in April, with maintenance at multiple terminals extending over the second quarter,” it added.
“Because we expect more natural gas will be in storage in the coming months, we forecast prices will be lower. The Henry Hub price in this STEO averages around $3.60 per MMBtu in 2H25 and $4.30 in 2026, which is 21 percent and six percent lower than we forecast in April, respectively,” it continued.
“However, monthly forward price curves continue to reflect expectations of gradually increasing prices through the end of 2026. April has the lowest monthly average price in our 2026 forecast at around $3.60 per MMBtu. We expect prices will rise from there, reaching more than $5.40 per MMBtu in December,” it stated.
The EIA went on to note in its August STEO that, although its storage forecast is higher than it was in April, it still expects natural gas inventories to fall closer to the five-year average in the coming months, “putting upward pressure on prices”.
“After growing by more than one billion cubic feet per day (Bcf/d) from 1Q25 to 2Q25, dry natural gas production will fall by a similar amount over the next year,” the EIA said.
“At the same time, we expect that LNG exports will grow around two Bcf/d, further tightening supply-demand balances and contributing to higher prices later in the forecast period,” it added.
Rising natural gas production in recent months has added to higher than anticipated inventory levels, the EIA highlighted in its August STEO.
“We expect marketed natural gas production to grow by three percent over 2024 volumes, supported by growth of two Bcf/d in the Permian region and 0.9 Bcf/d in each of the Haynesville and Appalachia regions in 2025,” it noted.
“This growth has been sustained in part by the deployment of drilling rigs to natural gas-intensive shale plays. Baker Hughes reported on August 8 that 19 more active rigs were focused on drilling for natural gas than there were at the start of April, an 18 percent increase. The Haynesville region led the increase in natural gas-directed rig deployment,” it added.
In its latest STEO, the EIA said it expects marketed natural gas production will be generally unchanged next year, “even though we expect falling oil prices will reduce production of associated natural gas, particularly in the Permian Basin”.
“However, production declines will be muted as producers strategically position themselves to meet rising demand from several LNG projects that are set to enter service in late 2025 and 2026,” it added.
“We forecast marketed annual natural gas production to remain flat in 2026 compared with 2025, when increased non-associated gas production from the Haynesville region (0.3 Bcf/d) and Appalachia (0.7 Bcf/d) offset declines Eagle Ford and relatively flat production in the Permian,” the EIA said.
“In the Haynesville region, we expect production to remain near current levels through early 2026, before rising in the second quarter in response to LNG-related demand. The start of the Louisiana Energy Gateway pipeline, which is planned to enter service during this period, will support rising Haynesville output by improving takeaway capacity,” it went on to state.
“Additional export capacity from the new Golden Pass facility and Plaquemines LNG Phase 2 are also set to come online over the next two years,” the EIA pointed out in its August STEO.
A report sent to Rigzone by the Standard Chartered team on August 12 showed that the company expected the NYMEX basis Henry Hub U.S. natural gas nearby future price to average $3.35 per MMBtu in 2025 and $3.30 per MMBtu in 2026.
A J.P. Morgan research note sent to Rigzone by the JPM Commodities Research team on August 11 showed that J.P. Morgan expected the U.S. natural gas Henry Hub price to average $3.62 per MMBtu this year and $3.55 per MMBtu next year.
To contact the author, email andreas.exarheas@rigzone.com
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