EIA Revises Henry Hub Spot Price Down 16% From June STEO


   
Dawn Gallagher
DTN Energy Reporter

   OAKHURST, N.J. (DTN) --- In its latest Short-Term Energy Outlook, the Energy 
Information Administration lowered its forecast for natural gas prices on 
expected growing natural gas in storage in the coming months on slightly higher 
production and less power sector demand.

   The Henry Hub spot price, which averaged just over $3.00 MMBtu in June, is 
expected to average almost $3.40 MMBtu in the third quarter, down 16% from the 
June STEO forecast.

   "Our forecast for more natural gas in storage and lower prices comes after 
seven consecutive weeks (from late April to early June) of net injections 
greater than 100 billion cubic feet contributed to a recovery in storage 
volumes," the agency wrote.

   At the end of June, EIA estimates domestic natural gas inventories were 7% 
above the five-year average after ending the withdrawal season (November-March) 
4% below the five-year average, the lowest in three years. Injections exceeded 
the five-year average as U.S. natural gas production increased in the second 
quarter compared with the first. Inventories are expected to end the injection 
season on Oct. 31 with 3,910 Bcf of natural gas in storage, 5% above last 
month's STEO forecast and 3% more than the five-year average.

   EIA noted, however, that LNG demand and natural gas production will be two 
key drivers of natural gas price in the coming months.

   "If LNG demand is more or production is less than our forecast, inventories 
may end the injection season below our forecast and natural gas prices may be 
higher than our forecast. At the same time, with above-normal hurricane 
activity expected this summer, LNG exports may be disrupted if storms hit along 
the Gulf Coast, which could result in more U.S. inventories and lower natural 
gas prices than expected."

   In the second quarter, marketed natural gas production averaged 116.8 
billion cubic feet per day, a 4.7 Bcfd increased compared with the same period 
in 2024. Production is expected to remain near this level through 2026, 
averaging around 116 Bcfd in both 2025 and 2026. Higher natural gas prices 
throughout this year compared with 2024 have supported increased production. 
The benchmark Henry Hub spot price averaged $3.71 MMBtu in the first half of 
this year compared with $2.11 MMBtu in the first half of 2024.

   EIA expects the Henry Hub price to average almost $3.70 MMBtu in 2025 and 
$4.40 MMBtu next year, largely on expectations that production will fall 
slightly in 2026 while LNG exports continue to increase.




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