STEO: EIA Revises Henry Hub Spot Price Down 22% From Dec.


   
Kristina Davis
DTN Refined Fuels Market Reporter

   MIAMI, FL (DTN) -- The Energy Information Administration lowered on Tuesday 
(1/13) its near-term natural gas price forecast on expectations that milder 
winter temperatures and weaker space-heating demand will limit consumption 
during the seasonal peak, according to its Short-Term Energy Outlook released 
in January.
The Henry Hub spot price is now forecast to average $3.38 MMBtu in the first 
quarter of 2026, down 22% from the December STEO estimate of $4.35/MMBtu, the 
agency said. The revision reflects reduced winter demand after January 
temperatures came in milder than normal, easing pressure on U.S. benchmark 
prices.
On an annual basis, EIA expects Henry Hub prices to average just under 
$3.50/MMBtu in 2026, about 2% lower than 2025, before climbing roughly 33% in 
2027 to an annual average near $4.60/MMBtu as market conditions tighten. The 
agency noted that prices fell sharply in early January, with Henry Hub trading 
below $3/MMBtu on January 9, down from around $5/MMBtu a month earlier.
"Our lower first-quarter price forecast reflects reduced space-heating demand 
driven by milder-than-normal winter temperatures," the STEO report said, adding 
that near-term demand weakness has allowed prices to retreat despite continued 
growth in consumption later in the forecast period.
EIA said upward price pressure is expected to return in 2027 as demand growth 
outpaces supply. Expanding U.S. liquefied natural gas export capacity and 
rising natural gas use in the electric power sector are forecast to tighten 
balances, pushing storage inventories below the five-year (2021--25) average.
U.S. dry natural gas production is expected to increase by 1% in 2026 to nearly 
109 Bcf/d, with growth led by the Permian Basin as new takeaway capacity comes 
online, particularly in the second half of the year. In 2027, production growth 
slows to about 1%, as activity shifts toward the Haynesville region in response 
to higher prices.
Total U.S. natural gas demand, including exports, is forecast to grow by 2% in 
2027, reaching 119 Bcf/d, more than 1 Bcf/d above total supply, contributing to 
tighter market balances that support higher prices later in the outlook. 

   LNG exports are projected to remain the largest source of demand growth, 
supported by the continued ramp-up of Plaquemines LNG, Corpus Christi Stage 3, 
and the start of operations at Golden Pass LNG in mid-2026, the EIA stated.

    




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