U.S. Energy Information Administration expects Henry Hub natural gas price to increase in 2025 and 2026 as demand for natural gas grows faster than supply. There is more demand from U.S. LNG export facilities which reduces natural gas in storage compared with the last two years. EIA said Jan. 23 it expects U.S. benchmark Henry Hub natural gas spot price to increase in 2025 to average $3.10 per million British thermal units and in 2026 to average $4.00 per MMBtu from record lows in 2024.
EIA said increases in 2025 in demand – which includes domestic natural gas consumption and exports – will exceed increases in supply, including domestic natural gas production and imports. U.S. demand for natural gas increases in 2025 by 3.2 Bcfd and in 2026 by an additional 2.6 Bcfd.
Dry natural gas production is driving supply growth in this EIA forecast primarily from Permian Basin in 2025 and Permian and Haynesville in 2026. Production is expected to increase by 1 percent in 2025 to 104.5 Bcfd and by almost 3 percent to 107.2 Bcfd in 2026. Growth in Permian follows increased crude oil production because most natural gas production in the basin is associated gas.
U.S. natural gas inventories were above their five-year rolling averages in 2023 and 2024 – driving down natural gas prices. EIA added, “Because we expect demand to exceed supply over the next two years, the natural gas spot price increases in our forecast, and natural gas inventories fall below rolling averages in 2025 and continuing into 2026.”