Where Will Henry Hub Gas Price Land?

The Henry Hub spot price will average $6.48 per million British thermal units (MMBtu) in 2022 and $5.43 per MMBtu in 2023, according to the U.S. Energy Information Administration’s (EIA) latest short term energy outlook (STEO), which was released in December.

According to the STEO, the Henry Hub spot price will drop from $7.99 per MMBtu in the third quarter to $5.82 per MMBtu in the fourth quarter. The commodity will then jump to $6.17 per MMBtu in the first quarter of next year, before dropping to $5 per MMBtu in the second quarter and rising to $5.18 per MMBtu in the third quarter and $5.35 per MMBtu in the fourth quarter of 2023, the December STEO shows.

“We expect natural gas prices to increase from November levels as a result of both higher winter natural gas demand and rising LNG exports,” the EIA stated in its latest STEO.

“Our forecast for the Henry Hub spot price averages more than $6.00 per MMBtu in 1Q23, up from November’s monthly average of about $5.50 per MMBtu. We expect natural gas prices will begin declining after January as U.S. storage levels move closer to the previous five-year average, largely as a result of rising U.S. natural gas production,” the EIA added.

“However, the possibility of price volatility remains high,” the EIA warned.

In its November STEO, the EIA saw the Henry Hub spot price averaging $6.49 per MMBtu in 2022 and $5.46 per MMBtu in 2023. In that STEO, the EIA projected that the commodity would hit $5.82 per MMBtu in 4Q, $6.21 per MMBtu in 1Q 2023, $5.04 per MMBtu in 2Q, $5.20 per MMBtu in 3Q and $5.40 per MMBtu in 4Q 2023.

At the time of writing, the Henry Hub price is trading at $4.99 per MMBtu. The commodity’s lowest 2022 close, so far, was seen on January 4, at $3.71 per MMBtu. Its highest 2022 close, so far, was seen on August 22, at $9.68 per MMBtu.

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