The U.S. Energy Information Administration (EIA) projected that the Henry Hub spot price will average well above $4 per million British thermal units (MMBtu) next year in its latest short term energy outlook (STEO), which was released on September 9.
According to its latest STEO, the EIA sees the Henry Hub natural gas spot price averaging $3.52 per MMBtu in 2025 and $4.28 per MMBtu in 2026. The commodity averaged $2.19 per MMBtu in 2024, the STEO showed.
A quarterly breakdown included in the EIA’s latest STEO highlighted that the EIA expects the Henry Hub natural gas spot price to average $3.04 per MMBtu in the third quarter of 2025, $3.72 per MMBtu in the fourth quarter, $4.25 per MMBtu in the first quarter of next year, $3.64 per MMBtu in the second quarter, $4.26 per MMBtu in the third quarter, and $4.99 per MMBtu in the fourth quarter of 2026.
In its previous STEO, which was released last month, the EIA projected that the Henry Hub natural gas spot price would average $3.61 per MMBtu in 2025 and $4.34 per MMBtu in 2026.
That STEO saw the commodity averaging $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.
“Natural gas inventories remain relatively high, and August ended with six percent more natural gas in storage compared with the five-year average,” the EIA said in its September STEO.
“The Henry Hub spot price averaged $2.91 per MMBtu in August (10 percent below our August STEO estimate). Lower prices over this summer have been driven by robust production and reduced natural gas consumption in the electric power sector,” the EIA added.
“However, we continue to expect prices will gradually rise through the upcoming winter because inventories in our forecast are withdrawn at faster than normal rate this winter,” it continued.
In its STEO, the EIA said the “relatively strong inventory draws” in its forecast “mostly reflect rising LNG exports amid flattening U.S natural gas production”.
“We forecast U.S. natural gas inventories will end March at one percent above the five-year average. In the forecast, the Henry Hub price reaches its winter peak in January at $4.60 per MMBtu,” it added.
The EIA also highlighted in its latest STEO that, “historically, average annual prices for gas and oil change in tandem”. It went on to state that it expects this year will be the first time they move in the opposite direction since 2014.
“By 2026, we forecast natural gas prices will be nearly double compared with 2024, while the West Texas Intermediate (WTI) crude oil price in our outlook falls 38 percent, leading to the lowest crude oil to natural gas price premium since 2005 at just over $4.00 per MMBtu,” the EIA noted in its STEO.
“The U.S. benchmark Henry Hub natural gas price averaged $3.66 per MMBtu in the first half of 2025 (1H25), 67 percent higher than the 2024 annual average of $2.19 per MMBtu,” it added.
“In contrast, the U.S. benchmark WTI crude oil price has averaged about $12.00 per MMBtu in 1H25, 11 percent lower than the 2024 annual average,” it continued.
The EIA went on to state in its STEO that, “with these price movements”, it expects “decreases in natural gas produced as a byproduct of oil directed drilling will offset increases in that produced by natural gas-directed drilling”.
“Overall, we expect U.S. marketed natural gas production will average 117.1 billion cubic feet per day (Bcfpd) in 2025 and 116.8 Bcfpd in 2026,” it added.
“We expect the Permian region, an oil-rich region that produces large amounts of associated natural gas, to slow production growth,” it continued.
The EIA highlighted in its September STEO that Permian production in its forecast averages 27.6 Bcfpd in 2026, “a 0.2 Bcfpd increase from 2025”.
“We also expect natural gas production from the Bakken and Eagle Ford regions, as well as in the STEO region known as the rest of Lower 48 states, will decrease by 1.3 Bcfpd combined,” the EIA added in the STEO.
“However, we expect the natural gas-rich Appalachia and Haynesville regions will increase by a combined 0.8 Bcfpd in 2026,” the EIA went on to state.
In a BMI report sent to Rigzone by the Fitch Group on September 12, BMI projected that the front month Henry Hub natural gas price will average $3.20 per MMBtu in 2025 and $3.60 per MMBtu in 2026.
In a report sent to Rigzone by the Standard Chartered team on September 10, Standard Chartered forecast that the NYMEX basis Henry Hub natural gas nearby future price will average $3.35 per MMBtu in 2025 and $3.30 per MMBtu in 2026.
To contact the author, email andreas.exarheas@rigzone.com
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