EIA: Winter natural gas prices expected to jump 40%

The U.S. Energy Information Administration (EIA) expects the average price of natural gas for the remainder of the winter heating season to be about 40% higher than the November spot price, despite expectations that U.S. natural gas inventories will remain higher than average throughout the winter.

Although the price increase is notable, recent U.S. natural gas prices have been at near or record lows, and the increase will keep prices in line with previous end-of-winter prices.

The United States started the winter season with 6% more natural gas in storage than average, and EIA forecasts in its December Short-Term Energy Outlook (STEO) that natural gas inventories will remain 2% above the five-year average at the end winter.

“Recent natural gas prices have been historically low, so a colder winter than last will draw on storage and raise prices to some extent,” said EIA Administrator Joe DeCarolis. “We expect natural gas prices will remain well below the high prices we saw in 2021 and 2022.”

EIA expects U.S. benchmark Henry Hub natural gas spot price to increase from just above $2.00 per million British thermal units (MMBtu) in November to an average of about $3.00/MMBtu for the rest of the winter heating season.