The US Energy Information Administration (EIA) today raised its Henry Hub natural gas price outlook after a powerful winter storm tightened markets and triggered record storage withdrawals, even as projections for next year show lower averages.
In its February Short Term Energy Outlook (STEO), the EIA boosted its near-term Henry Hub forecast by roughly 40pc after the late-January US storm sent spot prices surging to multiyear highs and cut storage levels below prior expectations. That puts prices at $4.60/mmBtu in February and $4.12/mmBtu in March, up from last month's outlook of $3.46/mmBtu and $2.86/mmBtu, respectively.
The EIA's full-year Henry Hub average now sits $4.31/mmBtu, 85¢/mmBtu higher than last month's forecast of $3.46/mmBtu.
Despite the near term spike, the agency lowered its broader 2027 price trajectories by 5pc, saying that high winter prices will prompt a production rebound strong enough to temper the market later this year. The Henry Hub spot price was now expected to be $4.38/mmBtu next year, down from the $4.59/mmBtu forecast last month.
January brought the most acute tightness US gas markets have encountered since 2022. Henry Hub averaged $7.72/mmBtu for the month, up 81pc from December levels, and set a nominal record daily high of $30.72/mmBtu on 23 January as widespread cold weather elevated heating demand and curtailed production, the agency said.
The storm's intensity culminated in the largest weekly storage withdrawal on record, 360 Bcf (10.2bn m³) in the week ending 30 January, pulling inventories sharply below previous estimates. As a result, the EIA revised storage levels to end the heating season in March below 1.9 Tcf, about 8pc lower than its prior forecast, contributing to the February and March uplift in price projections.
The agency expects freeze-off losses to unwind quickly and production to rebound, with US dry gas output growing by around 2pc in 2026 as higher prices stimulate drilling and new pipeline capacity enters service, particularly in the Permian basin of west Texas and the Haynesville shale centered in Louisiana.
