EIA: U.S. natural gas prices to rise amid robust inventories this winter
The average price of natural gas this winter is expected to exceed the November spot by about 40% despite projections that U.S. natural gas inventories will be higher than average throughout the season, according to the U.S. Energy Information Administration (EIA).
U.S. benchmark Henry Hub natural gas spot price is expected to average about $3 per million British thermal units for the remainder of the season from about $2 per million British thermal units in November.
On Tuesday (Dec. 10), the EIA released the December Short-Term Energy Outlook that shows “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.” In the United States, the winter season started with 6% more natural gas in storage than average, and inventories are projected to be 2% above the five-year average at the end of 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.”
Following are other highlights from the December Short-Term Energy Outlook.
• The recent extension of OPEC+ oil production cuts is expected to cause global oil inventories to fall by about 700,000 barrels per day in the first quarter of 2025. After the period, additional OPEC+ production and continued supply growth outside of OPEC+ should reverse the trend of decreasing inventory. The inventory is projected to rise by about 100,000 barrels per day over the remainder of 2025.
• The rising inventory of crude oil is expected to put downward pressure on prices. International benchmark Brent crude oil spot price is projected to fall from an average of $74 per barrel in the first quarter of 2025 to an average of $72 per barrel in the fourth quarter of the year.
• U.S. crude oil production is expected to continue to rise in 2025, while U.S. refiners process less crude oil than in 2024. This is expected to lead to net crude oil imports falling to 1.9 million barrels per day in 2025, the least crude oil net imports in a year since 1971.