U.S. EIA Raises 2025 Henry Hub Natural Gas Price Forecast After January Cold Snap

The benchmark Henry Hub spot price is expected to average $3.80 per million British thermal units (MMBtu) during 2025, according to the U.S. Energy Information Administration’s February Short Term Energy Outlook. This is about 20 percent higher than the previous forecast. The increase in the natural gas price forecast can be attributed to a cold snap at the end of January increasing space heating demand and leading to a 12 percent rise in U.S. natural gas consumption compared to the previous five-year average for the month.

The increase in natural gas consumption led to the fourth-largest weekly withdrawal from storage in the Lower 48 states. During the week ending Jan.24, stocks declined by 321 billion cubic feet (Bcf), which was around 70 percent higher than the five year (2020-24) average withdrawal for the same during January. U.S. natural gas storage withdrawals during January totaled close to 1,000 Bcf, as a result U.S. natural gas inventories are around four percent below their previous five-year average.

In terms of Brent crude oil, the agency projects growth in global oil production and significant reduction in crude oil prices up until the end of 2026. The agency does not expect the most recent sanctions against Russia’s oil and shipping sectors to have a significant impact on global oil production or prices. The sanctions could impact trade flows and dynamics, however the impact on the commodities price is expected to be largely muted.

In the agency’s latest short term energy outlook U.S. retail electricity prices for the residential sector are projected to increase by two percent during 2025, the smallest yearly rise in residential electricity prices since 2020. Moreover, the agency projects the U.S. to export around 100 million short tons of coal during 2025 and 2026, around two percent lower compared to the agency’s January projection. The reduction in U.S. coal exports in the latest outlook can be attributed to China’s tariffs against the U.S.