In its latest short term energy outlook (STEO), which was released on December 9, the U.S. Energy Information Administration (EIA) increased its Henry Hub spot price forecast for 2025.
According to this STEO, the EIA now expects the commodity to average $3.56 per million British thermal units (MMBtu) this year. In its previous STEO, which was released in November, the EIA projected that the Henry Hub spot price would average $3.47 per MMBtu in 2025.
The EIA’s latest STEO showed that the commodity averaged $4.15 per MMBtu in the first quarter of this year, $3.19 per MMBtu in the second quarter, and $3.03 per MMBtu in the third quarter. It forecasts that the Henry Hub spot price will come in at $3.87 per MMBtu in the fourth quarter.
For 2026, the EIA slightly decreased its Henry Hub spot price forecast, projecting that the commodity will average $4.01 per MMBtu next year. In its previous STEO, the EIA saw the commodity averaging $4.02 per MMBtu in 2026.
A quarterly breakdown included in the EIA’s latest STEO projected that the Henry Hub spot price will average $4.35 per MMBtu in the first quarter of 2026, $3.32 per MMBtu in the second quarter, $3.91 per MMBtu in the third quarter, and $4.48 per MMBtu in the fourth quarter.
“An early December cold snap is putting upward pressure on natural gas prices,” the EIA said in its latest STEO.
“The Henry Hub spot price in our forecast averages around $4.30 per MMBtu this winter heating season (November-March), 22 percent higher than last winter,” it added.
“We raised our forecast for prices this winter by more than 40 cents per MMBtu on average compared with last month’s STEO, largely because early December has been colder than we assumed in last month’s STEO, leading us to raise our estimate of natural gas used for space heating,” it continued.
“Based on data from the National Oceanic and Atmospheric Administration, we assume December will have eight percent more heating degree days (HDDs) than the 10-year average, and seven percent more HDDs than we assumed in last month’s forecast,” it noted.
“Because of the colder weather, we now forecast the residential and commercial sectors will consume six percent more natural gas in December than we forecast last month, reducing the amount of natural gas held in storage,” the EIA went on to state.
In its December STEO, the EIA noted that the U.S. entered the winter heating season with four percent more working natural gas in storage than the previous five-year (2020-2024) average.
“We expect inventory withdrawals will be 580 billion cubic feet (Bcf) this December, 28 percent more than the five-year average withdrawal for the month,” the EIA said in its STEO.
“We forecast U.S. natural gas stocks will end the winter at 2,000 Bcf, nine percent above the five-year average,” they added.
The EIA also stated in its latest STEO that rising production helps moderate natural gas prices next year.
“We expect the Henry Hub spot price to average almost $4.50 per MMBtu in 4Q26, down five percent from last month’s forecast,” the EIA said.
“U.S dry natural gas production in our forecast averages 109 billion cubic feet per day (Bcfpd) in 2026, up one percent from this year,” it added.
“We raised our forecast for U.S. natural gas production compared with the November STEO after we updated our assumptions about natural gas-to-oil ratios (GORs),” it noted.
“Specifically, we raised our expectations of GORs in the Permian region based on recent production trends, leading to more overall natural gas production in our forecast for 2026,” the EIA went on to state.
In a report sent to Rigzone by the JPM Commodities Research team on December 12, J.P. Morgan projected that the U.S. natural gas Henry Hub price will average $3.59 per MMBtu in 2025 and $3.74 per MMBtu in 2026.
In this report, J.P. Morgan forecasted that the commodity will come in at $3.45 per MMBtu in the fourth quarter of 2025, $3.85 per MMBtu in the first quarter of 2026, $3.35 per MMBtu in the second quarter, $3.60 per MMBtu in the third quarter, and $4.15 per MMBtu in the fourth quarter of next year.
A Standard Chartered report dated December 10, which was sent to Rigzone by the Standard Chartered team recently, showed that the company expected the NYMEX basis Henry Hub U.S. natural gas nearby future price to average $3.550 per MMBtu this year and $4.025 per MMBtu next year.
In that report, Standard Chartered forecasted that the commodity will average $3.800 per MMBtu in the fourth quarter of 2025, $4.200 per MMBtu in the first quarter of 2026, $3.600 per MMBtu in the second quarter, $3.800 per MMBtu in the third quarter, and $4.500 per MMBtu in the fourth quarter.
To contact the author, email andreas.exarheas@rigzone.com
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