Higher Henry Hub Natural Gas Prices Ahead
By B. Henry Henderson
The US Energy Information Administration (EIA) is expecting increases in the Henry Hub natural gas price in 2025 and 2026 as demand for natural gas grows faster than supply. This is driven mainly by more demand from US liquefied natural gas (LNG) export facilities, reducing the natural gas in storage compared with the last two years. In its January Short-Term Energy Outlook, the EIA forecast the Henry Hub natural gas spot price to increase in 2025 to average US$3.10 per MMBtu and in 2026 to average US$4.00 per MMBtu from the record low set in 2024.
In 2024, the Henry Hub natural gas spot price averaged US$2.21 per MMBtu, the lowest average annual price in inflation-adjusted dollars ever reported. The annual average Henry Hub natural gas spot price in 2024 decreased by 16% from its 2023 average and 68% from its 2022 average of US$6.45 per MMBtu, the largest two-year decline on record. The monthly average Henry Hub spot natural gas price in 2024 ranged from US$3.25 per MMBtu in January to an all-time low of US$1.51 per MMBtu in March, reflecting a narrower US$1.74 per MMBtu range of monthly prices across the year than the average range of $2.32 per MMBtu over the prior five years.
The EIA expects that total US demand for natural gas increases in 2025 by 3.2 Bcf/d (90.6 x106 m3/d) and in 2026 by an additional 2.6 Bcf/d (73.6 x106 m3/d), driven by more demand for natural gas for LNG exports. In 2025, LNG exports grow by 2.1 Bcf/d (59.4 x106 m3/d) and in 2026 LNG exports grow by an additional 2.1 Bcf/d. The increase is the result of the start-up of three new LNG export facilities: Plaquemines LNG, Corpus Christi Stage 3, and Golden Pass LNG.
The EIA’s forecast for US domestic consumption of natural gas remains flat in 2025 and 2026 as declining electric power consumption with more renewables online is mostly offset by increases in residential and commercial consumption in 2025 and an increase in industrial consumption in 2026. According to EIA data, residential and commercial consumption of natural gas will increase 7% in 2025 to 22.5 Bcf/d (677.1 x106 m3/d), which is closer to the five-year average of 22.3 Bcf/d (631.4 x106 m3/d) than the consumption in 2024 of 21 Bcf/d (594.6 x106 m3/d).
