USA EIA Raises Henry Hub Price Forecast for 2026, 2027
The U.S. Energy Information Administration (EIA) raised its Henry Hub natural gas spot price projection for 2026 and 2027 in its latest short term energy outlook (STEO), which was released earlier this month.
According to its July STEO, which was published on July 7 and completed its forecast on July 1, the EIA now sees Henry Hub natural gas spot price averaging $3.67 per million British thermal units (MMBtu) this year and $3.49 per MMBtu next year. In its previous STEO, which was released in June, the EIA projected that the Henry Hub natural gas spot price would come in at $3.60 per MMBtu in 2026 and $3.46 per MMBtu in 2027.
A quarterly breakdown included in its latest STEO showed that the EIA sees the commodity averaging $3.37 per MMBtu in the third quarter of 2026, $3.57 per MMBtu in the fourth quarter, $3.83 per MMBtu in the first quarter of next year, $2.99 per MMBtu in the second quarter, $3.36 per MMBtu in the third quarter, and $3.78 per MMBtu in the fourth quarter.
In its previous STEO, the EIA projected that the Henry Hub natural gas spot price would come in at $3.22 per MMBtu in the third quarter of this year, $3.47 per MMBtu in the fourth quarter, $3.78 per MMBtu in the first quarter of 2027, $2.97 per MMBtu in the second quarter, $3.34 per MMBtu in the third quarter, and $3.76 per MMBtu in the fourth quarter.
Inventories Help Limit Upward Price Pressure
“Natural gas inventories remain above the five-year average through much of our forecast, helping limit upward price pressures,” the EIA said in its July STEO.
“Inventories remain relatively high because we expect record natural gas production, led by growth in the Permian region, to help meet rising demand,” it added.
At the end of June, U.S. working natural gas inventories were six percent above the five-year average, the EIA highlighted in its latest STEO.
“We forecast U.S. working natural gas inventories will reach 3,966 billion cubic feet (Bcf) by the end of October, five percent above the five-year average,” the EIA said in the STEO.
“With above average inventories heading into winter, we expect the Henry Hub spot price in 4Q26 will average $3.57 per million British thermal units, which is five percent less than the same quarter last year,” it added.
“On the back of strong demand growth next year, we expect the inventory surplus to the five-year average will narrow to one percent at the end of October 2027,” it continued.
“Henry Hub prices in 4Q27 average $3.78 per MMBtu in our forecast, up six percent from 4Q26. For 2027 as a whole, we expect the Henry Hub price will average just under $3.50 per MMBtu, down slightly from an average of close to $3.60 per MMBtu in 2025 and 2026,” it went on to state.
Weather Undermines Near-Term Fundamentals
In an EBW Analytics Group report sent to Rigzone on Tuesday, Eli Rubin, an energy analyst at the company, outlined that “milder weather” was undermining near-term fundamentals in natural gas.
“The August contract tested as low as $2.847 yesterday [Monday] before recovering, but notable weather weakening over the past 24 hours for Weeks 2 and 3 - particularly over the central and eastern U.S. - may further undermine physical support in late July,” Rubin said in the report.
“In the immediate term, national daily CDDs may peak tomorrow [Wednesday] at 15.2 CDDs - with severe heat ranging from the Midwest through Mid-Atlantic - before subsiding,” he added.
“Henry Hub spot gas prices cleared at just $2.81 per million British thermal units yesterday. Technicals suggest support may crumble into the low-$2.80s per MMBtu,” he continued.
In the report, Rubin warned that, “if weather weakens more, LNG stays subdued, and production rises, further downside may be ahead for NYMEX gas in mid-to-late summer”.
The EBW report highlighted that the August natural gas contract closed at $2.897 per MMBtu on Monday. This marked a 4.3 cent, or 1.5 percent, decrease from Friday’s close, the report outlined.
To contact the author, email andreas.exarheas@rigzone.com
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