EIA: Henry Hub Spot Price Falls Nearly 13% from Feb. STEO

MIAMI, FL (DTN) — The Energy Information Administration lowered its U.S. natural gas price outlook after milder-than-expected temperatures in February left more gas in storage and eased market tightness, according to the agency’s latest Short Term Energy Outlook released Tuesday (3/10) .
The Henry Hub spot price averaged $3.53/MMBtu in 2025 and is now forecast to average $3.76/MMBtu in 2026, down by nearly 13% from the February STEO forecast of $4.31/MMBtu. EIA data showed that the downward revision reflects milder winter weather in February, which slowed storage withdrawals and increased expected inventories compared with last month’s outlook.

The EIA expects Henry Hub prices to average nearly $3.90/MMBtu in 2027, also about 12% lower than last month’s outlook, reflecting higher than expected production and larger inventories as supply growth outpaces demand over the next several years.
U.S. natural gas prices also faced limited upward pressure from international markets despite disruptions to global LNG trade tied to the effective closure of the Strait of Hormuz. Additionally, U.S. prices are expected to remain relatively insulated because LNG export facilities were already operating near capacity, limiting the ability to ship additional volumes abroad in the near term.  
U.S. natural gas inventories are now expected to exit the withdrawal season in March near 1,840 Bcf, roughly in line with the five- year average. Storage withdrawals slowed in February as milder weather spread across much of the country following historic draws earlier in the winter tied to Winter Storm Fern and subsequent cold temperatures.  
The EIA-STEO anticipates increased crude oil activity to drive higher associated natural gas production in the coming years. Marketed natural gas production is forecast to average about 118 Bcfd in 2026, up from roughly 116 Bcfd in 2025, before rising further to about 121 Bcfd in 2027, the data showed. Growth is expected to come primarily from the Haynesville, Permian, and Appalachia regions.  
Higher oil prices are expected to encourage additional drilling in the Permian Basin increasing associated gas output as new pipeline capacity allows producers to bring more supply to market. The EIA said stronger oil directed drilling activity will continue supporting natural gas production growth through the forecast period.