The U.S. Power Data Administration (EIA) lowered its Henry Hub spot worth forecasts for 2026 and 2027 in its newest quick time period vitality outlook (STEO), which was launched on Might 12.
In accordance with this STEO, the EIA now sees the Henry Hub spot worth averaging $3.50 per million British thermal items (MMBtu) this 12 months and $3.18 per MMBtu subsequent 12 months. In its earlier STEO, which was launched in April, the EIA projected that the Henry Hub spot worth would common $3.67 per MMBtu in 2026 and $3.59 per MMBtu in 2027.
A quarterly breakdown included within the EIA’s newest STEO noticed the Henry Hub spot worth coming in at $2.83 per MMBtu within the second quarter of this 12 months, $3.08 per MMBtu within the third quarter, $3.31 per MMBtu within the fourth quarter, $3.43 per MMBtu within the first quarter of subsequent 12 months, $2.82 per MMBtu within the second quarter, $3.15 per MMBtu within the third quarter, and $3.32 per MMBtu within the fourth quarter.
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In its earlier STEO, the EIA projected that the Henry Hub spot worth would common $3.01 per MMBtu within the second quarter of this 12 months, $3.26 per MMBtu within the third quarter, $3.60 per MMBtu within the fourth quarter, $3.86 per MMBtu within the first quarter of subsequent 12 months, $3.14 per MMBtu within the second quarter, $3.53 per MMBtu within the third quarter, and $3.83 per MMBtu within the fourth quarter.
Each STEOs confirmed that the Henry Hub spot worth got here in at $3.53 per MMBtu in 2025.
“We estimate that greater than 2,020 billion cubic ft (Bcf) of pure gasoline was withdrawn from storage over this winter heating and withdrawal season (November-March), or 4 p.c greater than the five-year (2021-2025) common,” the EIA famous in its Might STEO.
“Henry Hub spot costs reached a month-to-month common of $7.72 per MMBtu in January. Regardless of a colder than regular January, near-normal circumstances for the remaining season supported storage ranges that had been simply above the five-year common by the top of March,” it added.
“At winter’s finish, we estimate that U.S. working pure gasoline in underground storage totaled 1,908 Bcf, or 4 p.c greater than the five-year common. With storage rising again above the seasonal common the Henry Hub spot worth in April fell to $2.77/MMBtu,” it continued.
“With greater manufacturing, we anticipate pure gasoline injections into storage through the April–October injection season to be above common. We forecast the Henry Hub worth will common $2.83/MMBtu in 2Q26, 11 p.c decrease than in 2Q25,” it went on to state.
The EIA projected in its Might STEO that U.S. pure gasoline inventories will finish the injection season on October 31 at seven p.c above the earlier five-year common.
“Larger storage ranges assist meet demand and cut back the chance of worth volatility,” the EIA mentioned.
“We anticipate the Henry Hub worth to common about $3.50/MMBtu in 2026 and $3.18/MMBtu in 2027,” it highlighted.
In its newest STEO, the EIA identified that marketed pure gasoline manufacturing within the Decrease 48 (L48) averaged 117.2 billion cubic ft per day (Bcfpd) within the first quarter of 2026, which it mentioned was a 4 p.c enhance in contrast with the identical interval in 2025.
“We anticipate L48 manufacturing to steadily enhance all through our forecast interval, averaging 118.9 Bcfpd in 2026 and 124.0 Bcfpd in 2027,” the EIA mentioned.
“Larger crude oil costs all through 2026 in contrast with final 12 months assist sustained manufacturing of related pure gasoline,” it added.
“We forecast L48 marketed pure gasoline manufacturing will enhance three p.c this 12 months in contrast with 2025, largely due to rising manufacturing within the latter a part of the 12 months. This enhance is pushed primarily by the Permian area, which we anticipate to provide 29.2 Bcfpd in 2026, or six p.c greater than in 2025,” it continued.
The EIA famous in its Might STEO that the Permian area is predominantly an oil producing area and mentioned operators within the space are influenced by crude oil costs.
“A lot of the Permian’s pure gasoline manufacturing is related pure gasoline,” it highlighted.
“At present, the area faces extreme pipeline constraints, as evidenced by record-low Waha Hub spot costs, which have averaged beneath zero for eight of the final 9 months,” it added.
“Nevertheless, we anticipate these constraints shall be alleviated later this 12 months, and we forecast manufacturing within the Permian area to develop by 10 p.c subsequent 12 months,” the EIA mentioned.
“We additionally forecast pure gasoline manufacturing within the Haynesville area, which is a pure gas-dominant area, to develop by six p.c this 12 months and eight p.c subsequent 12 months,” it acknowledged.
“In contrast with final month’s forecast, we anticipate pure gasoline manufacturing within the L48 to be 1.1 Bcfpd greater this 12 months and a couple of.6 Bcfpd greater in 2027, based mostly on our evaluation that reveals rising gasoline to grease ratios from many wells within the Permian area,” the EIA went on to state.
An EBW Analytics Group report despatched to Rigzone on Tuesday highlighted that the June pure gasoline contract closed at $3.024 per MMBtu on Monday. This marked a 6.4 cent, or 2.2 p.c, rise from Friday’s shut, the report outlined.
“The NYMEX front-month examined as excessive as $3.09 per MMBtu yesterday earlier than receding, with technicals nonetheless pointing greater,” Eli Rubin, an vitality analyst on the firm, mentioned within the report.
“Anticipated document warmth within the Mid-Atlantic immediately (day-ahead costs at PJM West reached $229/MWh) is prone to shortly fade later this … week, with immediate-term CDDs to halve from Tuesday to Thursday,” he added.
Henry Hub spot gasoline costs reached $3.07 per MMBtu on Monday, Rubin highlighted. He famous, nonetheless, that “retreating warmth and faltering LNG feedgas demand … might quell bodily upside into the top of the week”.
Rubin went on to state within the EBW report that “short-term worth motion might affect dealer positioning forward of subsequent week’s contract rollover”.
“From a seasonal perspective, a quick Might warmth wave, notably one excluding the South Central, doesn’t meaningfully change expectations of longer-term elementary softness,” he mentioned.
“We stay cautious of quick squeeze dangers pushing costs nonetheless greater in coming weeks earlier than seemingly relenting later this 12 months,” he continued.
To contact the creator, e mail andreas.exarheas@rigzone.com
