The average price of natural gas this winter is expected to be about 40% higher than November’s spot price, even though U.S. natural gas inventories are projected to be above average throughout the season, according to the U.S. Energy Information Administration (EIA).
The benchmark Henry Hub natural gas spot price, which was around $2 per million British thermal units (MMBtu) in November, is predicted to average approximately $3 MMBtu for the remainder of the winter season. The EIA’s December Short-Term Energy Outlook, released on December 10, highlights that natural gas prices in the U.S. have recently been at near-record lows, and the increase this winter will align prices with those typically seen at the end of the season.
The winter season began with U.S. natural gas inventories 6% higher than the average. The EIA forecasts that by the end of the season, inventories will remain 2% above the five-year average. Despite these higher storage levels, colder weather could lead to increased demand, drawing on reserves and pushing prices upward, though still significantly below the peaks observed in 2021 and 2022, according to EIA Administrator Joe DeCarolis.
Other projections from the December Short-Term Energy Outlook include expectations for global oil inventories to decline in the first quarter of 2025 due to OPEC+ production cuts, though this trend is expected to reverse later in the year as supply outside of OPEC+ grows. The international benchmark Brent crude oil price is predicted to dip from an average of $74 per barrel in early 2025 to $72 by the fourth quarter. Meanwhile, U.S. crude oil production is forecast to rise in 2025, but net crude oil imports will decrease to their lowest level since 1971, as U.S. refineries process less crude oil compared to 2024.
While natural gas prices are set to rise this winter, the overall outlook for energy markets suggests that the increases will remain moderate compared to recent record highs.Natural Gas prices set to rise this winter, EIA forecasts
Diversified Energy Company plc (LON:DEC) is an independent energy company engaged in the production, marketing, transportation and retirement of primarily natural gas and natural gas liquids related to its U.S. onshore upstream and midstream assets.
