In its latest short term energy outlook (STEO), which was released on October 7, the U.S. Energy Information Administration (EIA) lowered its Henry Hub natural gas spot price forecast for both 2025 and 2026.
According to this STEO, the EIA now sees the commodity coming in at $3.42 per million British thermal units (MMBtu) in 2025 and $3.94 per MMBtu in 2026. In its previous STEO, which was released in September, the EIA projected that the Henry Hub natural gas spot price would average $3.52 per MMBtu this year and $4.28 per MMBtu next year.
The EIA’s latest STEO sees the commodity averaging $3.33 per MMBtu in the fourth quarter of 2025, $3.86 per MMBtu in the first quarter of next year, $3.31 per MMBtu in the second quarter, $3.91 per MMBtu in the third quarter, and $4.68 per MMBtu in the fourth quarter of 2026.
In its September STEO, the EIA forecast that the Henry Hub natural gas spot price would average $3.04 per MMBtu in the third quarter of this year, $3.72 per MMBtu in the fourth quarter, $4.25 per MMBtu in the first quarter of 2026, $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.
The EIA’s October STEO highlighted that the commodity came in at $3.03 per MMBtu in the third quarter of 2025. Both the October and the September STEOs showed that the Henry Hub natural gas spot price averaged $4.15 per MMBtu in the first quarter of this year, $3.19 per MMBtu in the second quarter, and $2.19 per MMBtu overall in 2024.
In its October STEO, the EIA said it expects the Henry Hub spot price “to increase from around $3.00 per MMBtu in September to $4.10 per MMBtu by January 2026, almost 50 cents per MMBtu lower than we forecast last month”.
“We expect the Henry Hub price to average about $3.90 per MMBtu overall in 2026,” it added.
“Our lower price expectation reflects our forecast that natural gas production will be higher than we forecast last month, leading to more natural gas in inventory through the winter than previously expected,” the EIA continued.
“In addition to higher natural gas production in the forecast, since late August, above-average natural gas injections have increased storage levels heading into this winter. We now expect inventories to reach almost 3,980 billion cubic feet (Bcf) at the end of injection season, or five percent more than the five year average,” it went on to state.
The EIA highlighted in its latest STEO that this forecast is almost 70 Bcf more than it forecast last month.
“These higher than expected stocks at the start of winter support more natural gas in storage throughout winter 2025-26, assuming near-normal temperatures,” the EIA said in the STEO.
“Natural gas inventories in our forecast end the withdrawal season on March 31 at 1,990 Bcf, eight percent above the five-year average,” it added.
The EIA noted in its latest STEO that it expects marketed natural gas production in the U.S. Lower 48 states “to increase slightly in 2026 to an average of more than 118 billion cubic feet per day (Bcfpd) as growth from the three most prolific natural gas producing regions – the Appalachia, Permian, and Haynesville – is partly offset by declines from producing regions in the rest of the L48 states”.
The EIA highlighted in its October STEO that its forecast for U.S. marketed natural gas production in 2026 is 1.3 Bcfpd higher this month compared with its September STEO.
“We raised our expectations for natural gas production over the forecast based on data from July that showed natural gas production above our expectations, which increased the starting point for our forecast,” the EIA said in its latest STEO.
The organization stated in the report that, in 2026, it expects the combined production from the Appalachia, Permian, and Haynesville regions to account for 69 percent of overall U.S. production.
“We expect production in the Haynesville region to grow by two percent in 2026 to average 15.6 Bcfpd as higher natural gas prices has led to an increase in drilling activity in the region,” the EIA said.
“For 1H25, rig counts in the Haynesville region rose by seven to 39 rigs. We expect this trend to continue with the relatively higher forecast Henry Hub prices in 2026,” it added.
The EIA noted in its October STEO that, in the past, production in the Appalachia region has been constrained by limited takeaway capacity.
“But recently with the addition of the Mountain Valley Pipeline and demand growth from additional data centers in the Northeast that are increasing regional demand for electricity – including natural-gas fired generation – we expect production in Appalachia to grow by two percent in 2026 and average 37.6 Bcfpd,” it added.
The EIA went on to state in the STEO that the Permian Basin has been the most prolific natural gas growth area in the past and said it expects the Permian region production to rise nine percent, or 2.3 Bcfpd, this year.
“In the Permian region, growth in natural gas production is primarily the result of associated natural gas produced during oil production,” the EIA said in the report.
“As West Texas Intermediate (WTI) crude oil prices in our forecast fall in 2026, we expect Permian natural gas production growth to slow to one percent next year, reaching 28.0 Bcfpd,” it added.
“The forecast decline in WTI prices also reduces associated natural gas production from other regions such as the Eagle Ford, Anadarko, and Niobrara regions,” it continued.
In a report sent to Rigzone on Wednesday by the Standard Chartered team, the company projected that the nearby NYMEX basis Henry Hub nearby future U.S. natural gas price will average $3.55 per MMBtu in 2025, $4.03 per MMBtu in 2026, and $4.40 per MMBtu in 2027.
In that report, Standard Chartered forecast that the commodity will come in at $3.80 per MMBtu in the fourth quarter of this year, $4.20 per MMBtu in the first quarter of 2026, $3.60 per MMBtu in the second quarter, $3.80 per MMBtu in the third quarter, and $4.50 per MMBtu in the fourth quarter.
“We have adjusted our price forecasts for U.S. natural gas, based on the secular trends of U.S. LNG exports and data-center electrification,” Standard Chartered Bank Energy Research Head Emily Ashford said in the Standard Chartered report.
“We see near- to medium-term price support from increasing domestic demand for data-center power generation and export demand for LNG – notably destined for Europe – before global LNG oversupply risks become a headwind,” Ashford Added.
“We forecast Henry Hub natural gas futures averaging $4.025 per MMBtu in 2026 (from $3.30 per MMBtu), and $4.40 per MMBtu in 2027 (from 2.90 per MMBtu). Co-locating data centers with power-generation assets – notably natural gas – is an emerging trend, particularly for ‘hyperscale’ AI-focused data centers, which can consume as much electricity as 100,000 households,” Ashford continued.
“Around 35 percent of all global hyperscale data centers are located in Virginia, which is proximal to large natural gas-generation shale plays, notably the Utica and Marcellus shales. Texas is also a hub and has the Permian Basin and Eagle Ford close by. We believe that U.S. gas production can meet the increased demand if prices trend higher,” Ashford went on to state in the report.
To contact the author, email andreas.exarheas@rigzone.com
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