EIA: Henry Hub 2026 Outlook Raised 2% in July STEO


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- The Energy Information Administration (EIA) raised 
its U.S. natural gas price outlook for 2026 in its July Short-Term Energy 
Outlook (STEO), reflecting expectations for record domestic production to 
satisfy growing demand while maintaining inventories above the five-year 
average.

   The Henry Hub spot price is forecast to average $3.67/MMBtu in 2026, 
according to the July STEO, up about 1.9% from the agency's June forecast of 
$3.60/MMBtu. For 2027, the EIA expects Henry Hub prices to average $3.49/MMBtu, 
a 0.9% increase from the previous forecast of $3.46/MMBtu.

   Natural gas prices are projected to ease next year as abundant supplies 
offset stronger consumption. The agency expects the Henry Hub benchmark to 
average close to $3.70/MMBtu in 2026 before slipping below $3.50/MMBtu in 2027.

   Even with higher demand, storage levels are projected to remain well 
supplied. U.S. working natural gas inventories are expected to reach 3,966 Bcf 
by the end of October, about 5% above the five-year average, supported by 
record output led by associated gas production in the Permian Basin.

   Growing electricity demand remains a key driver of consumption. The EIA 
forecasts natural gas use in the electric power sector will increase 2% in 2026 
and another 4% in 2027, reaching a record 38.1 Bcf/d next year as utilities add 
gas-fired generation capacity and benefit from relatively low fuel costs.

   The agency expects the Henry Hub spot price to average $3.57/MMBtu during 
the fourth quarter of 2026, about 5% below the same period last year, before 
increasing to $3.78/MMBtu in the fourth quarter of 2027 as the inventory 
surplus narrows.

    




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