The U.S. Energy Information Administration (EIA) projected that the U.S. natural gas Henry Hub spot price will drop this year and rise next year in its latest short term energy outlook (STEO).
In the EIA’s January STEO, which was released on January 13 and completed its forecast on January 8, the EIA forecast that the commodity will average $3.46 per million British thermal units (MMBtu) in 2026 and $4.59 per MMBtu in 2027. The U.S. natural gas Henry Hub spot price averaged $3.53 per MMBtu in 2025, the EIA’s latest STEO showed.
According to a quarterly breakdown included in its latest STEO, the EIA sees the U.S. natural gas Henry Hub spot price coming in at $3.38 per MMBtu in the first quarter of 2026, $2.75 per MMBtu in the second quarter, $3.42 per MMBtu in the third quarter, $4.28 per MMBtu in the fourth quarter, $4.78 per MMBtu in the first quarter of 2027, $4.30 per MMBtu in the second quarter, $4.43 per MMBtu in the third quarter, and $4.84 per MMBtu in the fourth quarter of next year.
Last year, the Henry Hub spot price averaged $4.15 per MMBtu in the first quarter, $3.19 per MMBtu in the second quarter, $3.03 per MMBtu in the third quarter, and $3.75 per MMBtu in the fourth quarter, the EIA’s January STEO showed.
“On an annual basis, U.S. natural gas prices are relatively flat in 2026 before rising in 2027 as market conditions tighten,” the EIA said in its latest STEO.
“We expect the Henry Hub natural gas spot price will average just under $3.50 per million British thermal units (MMBtu) this year, a two percent decrease from 2025, and then rise by 33 percent in 2027 to an annual average of almost $4.60 per MMBtu,” it added.
In its STEO, the EIA noted that the Henry Hub spot price picks up in 2027 as demand growth outpaces supply growth.
“Expanding U.S. liquified natural gas (LNG) export capacity and higher natural gas consumption in the electric power sector contribute to stronger demand in 2027, pushing storage inventories below the five-year (2021-2025) average and placing upward pressure on prices,” the EIA said.
Looking at “near-term developments for this winter” in its January STEO, the EIA highlighted that it had lowered its Henry Hub price forecast for the first quarter of 2026 to an average of $3.38 per MMBtu from $4.35 per MMBtu last month.
“Our forecast assumes January temperatures will be milder than normal, which will likely limit natural gas consumption during the time of year when demand for space heating typically reaches its annual peak,” the EIA said in its STEO.
“Expectations of less natural gas demand have caused prices to drop sharply. The Henry Hub spot was below $3 per MMBtu on January 9, down from around $5 per MMBtu a month earlier,” it added.
In a media advisory sent to Rigzone by the AccuWeather team on January 20, AccuWeather warned that a “major winter storm” was expected to bring “dangerous ice and snow impacts to more than 150 million people across more than two dozen states starting Friday and through the weekend”.
In a statement sent to Rigzone by the AccuWeather team on Sunday, AccuWeather warned of a “multibillion dollar winter storm disaster” in the Unites States.
“The rapidly expanding impacts from freezing rain, ice, heavy snow, and dangerous cold are increasing the risk of life-threatening emergencies in areas without power and heat as a massive winter storm spreads across the country,” AccuWeather said in that statement.
“More than 200 million people across the U.S. are being impacted by the winter storm,” it added.
In an exclusive interview with Rigzone on Monday, Ole R. Hvalbye, a commodities analyst at Skandinaviska Enskilda Banken AB (SEB), highlighted a “massive rise” in U.S. natural gas prices on Monday, which he said was “primarily driven by weather risk and thus tightening short-term balances, hence a continuation of the market movements we witnessed last week”.
Hvalbye highlighted in the interview that “weather has re-entered the equation in force”, noting that “forecasts show a broad cold spell across large parts of the U.S., particularly the Midwest and East, with temperatures as low as 10 degrees below the 30-year normal for the end of this week”.
“That has materially lifted heating demand expectations at a time when the market is already sensitive,” he added.
“This is clearly reflected in Henry Hub, which has jumped to another level, and is now trading around $6.2 per MMBtu [million British thermal units], up more than 100 percent from … [around] $3 per MMBtu on January 16”, he continued.
To contact the author, email andreas.exarheas@rigzone.com
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