What Direction Will the Henry Hub Gas Price Take in 2026, 2027?
by Andreas Exarheas | Rigzone Staff
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
What direction will the U.S. Henry Hub natural gas spot price take in 2026 and 2027?
What direction will the U.S. Henry Hub natural gas spot price take in 2026 and 2027?
The answer to that question is down, according to the U.S. Energy Information Administration’s (EIA) latest weekly petroleum status report, which projected that the commodity will drop both this year and next year.
In its October STEO, the EIA forecast that the Henry Hub spot price will average $3.48 per million British thermal units (MMBtu) in 2026 and $3.16 per MMBtu in 2027. This STEO showed that the commodity averaged $3.53 per MMBtu in 2025.
A quarterly breakdown included in the EIA’s latest STEO showed that the EIA expects the commodity to come in at $3.30 per MMBtu in the fourth quarter of this year, $3.47 per MMBtu in the first quarter of 2027, $2.64 per MMBtu in the second quarter, $3.04 per MMBtu in the third quarter, and $3.49 per MMBtu in the fourth quarter.
“We forecast the Henry Hub spot price will average $3.16 per million British thermal units in 2027, down 32 cents per MMBtu (nine percent) from 2026,” the EIA highlighted in its October STEO.
“The decline largely reflects high prices in January 2026 in the aftermath of winter storm Fern, when the Henry Hub price averaged $7.72 per MMBtu as increased heating demand reduced natural gas supply,” it added.
“With inventory levels in our forecast for 2027 similar to inventories this year, we forecast the Henry Hub price will average $3.09 per MMBtu from February through December in 2027, unchanged from the same period in 2026,” it continued.
The EIA noted in its STEO that, “ample natural gas inventories, relative to the previous five-year average, limit upward price pressures” in its forecast.
“Inventories remain above the rolling five-year average in most months of our forecast, as ongoing growth in natural gas production supplies increases in liquefied natural gas exports and domestic demand growth,” it pointed out.
The EIA highlighted that monthly Henry Hub prices in its forecast for 2027 “reach a low for the year at just $2.60 per MMBtu in April and May” and end the year at $3.90 per MMBtu in December 2027.
Storage Injection Season
In its October STEO, the EIA pointed out that the natural gas market is entering the final weeks of the storage injection season.
“We estimate the United States held 3,523 billion cubic feet of natural gas in inventory at the end of September,” the EIA said in the STEO.
“Inventories in our forecast build by 328 Bcf during October – slightly less than average – to reach 3,850 Bcf at the end of October 2026, which would put inventories two percent above the five-year average to start the heating season on November 1,” it added.
“Although the end of October is typically considered the close of the injection season, depending on market and weather conditions, inventories can often build through mid-November,” the EIA pointed out.
Above average inventories entering the withdrawal season provide additional supply to meet winter heating demand, the EIA noted in its STEO, adding that its forecast assumes heating degree days this winter will be nearly unchanged from last winter on a national average basis, and one percent less than the previous five-winter average.
“Under these conditions, natural gas in storage provides a buffer against periods of increased consumption or reduced production,” the EIA said.
“However, prolonged periods of cold weather could increase withdrawals beyond our forecast,” it added.
In its latest weekly natural gas storage report, which was released on October 15 and included data for the week ending October 9, the EIA revealed that working gas in storage was 3,567 Bcf as of October 9, according to its estimates.
“This represents a net increase of 67 Bcf from the previous week,” the EIA stated in its report.
“Stocks were 143 Bcf less than last year at this time and 45 Bcf above the five-year average of 3,522 Bcf. At 3,567 Bcf, total working gas is within the five-year historical range,” it added.
Where Is the Henry Hub Price Going in the Near Term?
In an EBW Analytics Group report sent to Rigzone on Tuesday, EBW Analytics Group Energy Analyst Eli Rubin highlighted that the November natural gas contract was “testing support” at the “key” $3.00 per MMBtu level.
“The NYMEX front-month contract probed as low as $2.991 early this morning as national production readings reached a one-month high,” Rubin pointed out in the report.
“However, Gulf Coast LNG feedgas demand at record highs and pipeline constraints contributed to Henry Hub physical prices climbing to $3.32 per MMBtu – bucking weakness in NYMEX futures,” he added.
In this report, Rubin noted that weather-driven gas demand “recovered moderately for Weeks 2 and 3, narrowing the extent of projected storage builds into the end of the injection season”.
“Still, Weeks 2 and 3 forecasts combine for 41 gHDDs below 30-year normals,” he said.
Rubin went on to state in the report that, “although the November contract crashed through the 50-day moving average at $3.07, likely support near the $3.00 per MMBtu psychological level, record LNG demand, South Central storage 121 Bcf below year-ago levels, easing selling pressure on NYMEX winter contracts, and recovering weather may provide initial support at the front of the curve”.
This EBW report highlighted that the November natural gas contract settled at $3.058 per MMBtu on Monday. This marked a 5.8 cent, or 1.9 percent, drop from Friday’s close, the report outlined.
The report projected that the NYMEX front month natural gas contract price will “test support and recover” over the next seven to 10 days and become “structurally soft” over the next 30-45 days.
In an EBW Analytics Group report sent to Rigzone on Monday, Rubin noted that “hints of higher production” sent the natural gas price “tumbling”.
“The November contract tested as low as $3.029 Sunday evening – down 30.5 cents from Wednesday highs – as chillier weather and subsiding maintenance cleared the way for higher Marcellus production,” Rubin said in that report.
“However, while production capacity remains elevated, supply gains may soften this week as milder shoulder season weather returns,” he added.
“While Friday’s market reaction to higher production readings is a cautionary medium-to long term signal, supportive near-term catalysts – including Henry Hub spot prices, LNG feedgas gains, and widening weather forecasts aligning with technical support- suggest another probe higher for November first,” he continued.
This EBW report highlighted that the November natural gas contract settled at $3.116 per MMBtu on Friday. This marked a 12.0 cent, or 3.7 percent, drop from Thursday’s close, the report outlined.
The report also projected that the NYMEX front month natural gas contract price will “test support and recover” over the next seven to 10 days and become “structurally soft” over the next 30-45 days.
by Andreas Exarheas | Rigzone Staff
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas