IEA: Henry Hub price lowest since ’97
22 July 2024
Benchmark price fell 20% between January and June of this year
![](/Images/270xany/20240722-144906-Gas-Lines-Graph.jpg)
The average monthly wholesale spot natural gas price at the U.S. benchmark Henry Hub fell by 20% to $2.56 per million British thermal units (MMBtu) between January and June of this year, according to the U.S. Energy Information Administration (EIA).
The EIA, citing data from Refinitiv Eikon, said the Henry Hub price averaged $3.18/MMBtu in January, then dropped to $1.49/MMBtu in March, marking the lowest average monthly inflation-adjusted price since at least 1997. In addition, prices from February through April 2024 were the lowest ever recorded for these months.
The EIA cited record U.S. natural gas production, flat natural gas consumption, and relatively high natural gas inventories as causes for the low prices. A mild winter rounded out 2023, leading to even lower prices in early 2024.
Production
U.S. dry natural gas production averaged 106 billion cubic feet per day (Bcf/d) in November and December—the most ever produced—at a time when warmer-than-usual temperatures meant less natural gas was consumed for space heating.
However, natural gas production began to decrease in the first half of 2024, following a decline in mid-January due to Winter Storm Heather and historically low prices. Total dry natural gas production fell to 101.6 Bcf/d in April, the least since December 2022 (100.2 Bcf/d). As a result, less natural gas has been injected into U.S. storage than average so far this injection season (April–October), with May and June injections averaging 11% and 31% below their respective five-year averages, although inventories remain above their previous five-year range. As production has decreased and inventories are nearing the range of the previous five years, prices have increased from February and March but remain near historic lows.
Consumption
According to the National Oceanic and Atmospheric Administration, December 2023 was the warmest December on record in many U.S. locations, and December is when most households typically use natural gas for space heating. In December 2023, natural gas consumption in the residential and commercial sectors averaged a combined 34 Bcf/d, 19% less than December year-ago levels.