USA EIA Lowers Henry Hub Price Forecast for 2026, 2027

The U.S. Energy Information Administration (EIA) lowered its Henry Hub spot price forecasts for 2026 and 2027 in its latest short term energy outlook (STEO), which was released on May 12.

According to this STEO, the EIA now sees the Henry Hub spot price averaging $3.50 per million British thermal units (MMBtu) this year and $3.18 per MMBtu next year. In its previous STEO, which was released in April, the EIA projected that the Henry Hub spot price would average $3.67 per MMBtu in 2026 and $3.59 per MMBtu in 2027.

A quarterly breakdown included in the EIA’s latest STEO saw the Henry Hub spot price coming in at $2.83 per MMBtu in the second quarter of this year, $3.08 per MMBtu in the third quarter, $3.31 per MMBtu in the fourth quarter, $3.43 per MMBtu in the first quarter of next year, $2.82 per MMBtu in the second quarter, $3.15 per MMBtu in the third quarter, and $3.32 per MMBtu in the fourth quarter.

In its previous STEO, the EIA projected that the Henry Hub spot price would average $3.01 per MMBtu in the second quarter of this year, $3.26 per MMBtu in the third quarter, $3.60 per MMBtu in the fourth quarter, $3.86 per MMBtu in the first quarter of next year, $3.14 per MMBtu in the second quarter, $3.53 per MMBtu in the third quarter, and $3.83 per MMBtu in the fourth quarter.

Both STEOs showed that the Henry Hub spot price came in at $3.53 per MMBtu in 2025.

“We estimate that more than 2,020 billion cubic feet (Bcf) of natural gas was withdrawn from storage over this winter heating and withdrawal season (November-March), or four percent more than the five-year (2021-2025) average,” the EIA noted in its May STEO.

“Henry Hub spot prices reached a monthly average of $7.72 per MMBtu in January. Despite a colder than normal January, near-normal conditions for the remaining season supported storage levels that were just above the five-year average by the end of March,” it added.

“At winter’s end, we estimate that U.S. working natural gas in underground storage totaled 1,908 Bcf, or four percent more than the five-year average. With storage rising back above the seasonal average the Henry Hub spot price in April fell to $2.77/MMBtu,” it continued.

“With higher production, we expect natural gas injections into storage during the April–October injection season to be above average. We forecast the Henry Hub price will average $2.83/MMBtu in 2Q26, 11 percent lower than in 2Q25,” it went on to state.

The EIA projected in its May STEO that U.S. natural gas inventories will end the injection season on October 31 at seven percent above the previous five-year average.

“Higher storage levels help meet demand and reduce the risk of price volatility,” the EIA said.

“We expect the Henry Hub price to average about $3.50/MMBtu in 2026 and $3.18/MMBtu in 2027,” it highlighted.

In its latest STEO, the EIA pointed out that marketed natural gas production in the Lower 48 (L48) averaged 117.2 billion cubic feet per day (Bcfpd) in the first quarter of 2026, which it said was a four percent increase compared with the same period in 2025.

“We expect L48 production to steadily increase throughout our forecast period, averaging 118.9 Bcfpd in 2026 and 124.0 Bcfpd in 2027,” the EIA said.

“Higher crude oil prices throughout 2026 compared with last year support sustained production of associated natural gas,” it added.

“We forecast L48 marketed natural gas production will increase three percent this year compared with 2025, largely because of rising production in the latter part of the year. This increase is driven mainly by the Permian region, which we expect to produce 29.2 Bcfpd in 2026, or six percent more than in 2025,” it continued.

The EIA noted in its May STEO that the Permian region is predominantly an oil producing region and said operators in the area are influenced by crude oil prices.

“Most of the Permian’s natural gas production is associated natural gas,” it highlighted.

“Currently, the region faces severe pipeline constraints, as evidenced by record-low Waha Hub spot prices, which have averaged below zero for eight of the last nine months,” it added.

“However, we expect these constraints will be alleviated later this year, and we forecast production in the Permian region to grow by 10 percent next year,” the EIA said.

“We also forecast natural gas production in the Haynesville region, which is a natural gas-dominant region, to grow by six percent this year and eight percent next year,” it stated.

“Compared with last month’s forecast, we expect natural gas production in the L48 to be 1.1 Bcfpd higher this year and 2.6 Bcfpd higher in 2027, based on our analysis that shows rising gas to oil ratios from many wells in the Permian region,” the EIA went on to state.

An EBW Analytics Group report sent to Rigzone on Tuesday highlighted that the June natural gas contract closed at $3.024 per MMBtu on Monday. This marked a 6.4 cent, or 2.2 percent, rise from Friday’s close, the report outlined.

“The NYMEX front-month tested as high as $3.09 per MMBtu yesterday before receding, with technicals still pointing higher,” Eli Rubin, an energy analyst at the company, said in the report.

“Expected record heat in the Mid-Atlantic today (day-ahead prices at PJM West reached $229/MWh) is likely to quickly fade later this … week, with immediate-term CDDs to halve from Tuesday to Thursday,” he added.

Henry Hub spot gas prices reached $3.07 per MMBtu on Monday, Rubin highlighted. He noted, however, that “retreating heat and faltering LNG feedgas demand … may quell physical upside into the end of the week”.

Rubin went on to state in the EBW report that “short-term price action may influence trader positioning ahead of next week’s contract rollover”.

“From a seasonal perspective, a brief May heat wave, particularly one excluding the South Central, does not meaningfully change expectations of longer-term fundamental softness,” he said.

“We remain wary of short squeeze risks pushing prices still higher in coming weeks before likely relenting later this year,” he continued.

To contact the author, email andreas.exarheas@rigzone.com