EIA: Henry Hub Spot Price Seen 5% Below April STEO


   
Kristina Davis
DTN Refined Fuels Market Reporter

   MIAMI, FL (DTN) -- The Energy Information Administration (EIA) has lowered 
its U.S. natural gas price outlook for this year as stronger production growth 
and higher storage levels continue to weigh on prices, the agency's latest 
Short Term Energy Outlook (STEO) released Tuesday (5/12) showed.
The Henry Hub spot price is forecast to average $3.50/MMBtu in 2026, according 
to the EIA's STEO for May. That was about 5% lower than the $3.67/MMBtu it 
forecast in its April STEO, and also below the $3.53/MMBtu that natural gas 
averaged in 2025.  
The downward revision reflects rising marketed natural gas production and 
stronger storage injections as higher crude oil prices support associated gas 
output from oil-focused drilling regions, particularly in the Permian Basin.  
For 2027, the EIA expects Henry Hub prices to average about $3.18/MMBtu, nearly 
12% lower than last month's outlook of $3.59/MMBtu.  
The EIA said marketed natural gas production is expected to average 121.8 Bcf/d 
in 2026 and 126.8 Bcf/d in 2027, representing increases of 1% and 2.1%, 
respectively, from the prior month's forecast.  
The agency estimates U.S. working natural gas inventories ended March at 1,908 
Bcf, roughly 4% above the five year average, after storage levels recovered 
despite heavier winter withdrawals earlier in the season.  
With higher production, the EIA expects natural gas injections during the April 
through October injection season to remain above average, with inventories 
projected to finish October at 7% above the prior five year average.  
The report also noted that U.S. LNG export capacity expanded by about 0.9 Bcf/d 
in April following the startup of Golden Pass LNG Train 1 and additional output 
from Corpus Christi Stage 3. Still, the EIA said near-maximum export 
utilization rates are likely to limit the ability of U.S. LNG facilities to 
significantly increase shipments in the near term.




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