EIA's updated natural gas price forecast - May 9
Posted: Fri May 09, 2025 3:06 pm
Natural gas prices. The Henry Hub spot price fell to $3.44 per million British thermal units (MMBtu) in April, down 68 cents/MMBtu from the March average. The price decrease was primarily driven by relatively warm weather in March and early April, which led to higher-than-expected levels of natural gas injections into storage. We expect natural gas prices will rise in the coming months as the United States exports more LNG and demand for natural gas from the electric power sector increases seasonally. We forecast the Henry Hub spot price will average nearly $4.20/MMBtu in the third quarter of 2025 (3Q25). < I am using HH natural gas prices of $4.00 in Q3 and $4.50 in Q4 and for the year 2026. If we do have another colder than normal 2025/2026 winter in the U.S., we may see $6.00 Ngas prices in 2026.
Despite rising seasonal demand for natural gas heading into summer, our forecast for the 3Q25 Henry Hub price is almost double the price from a year earlier and is contributing to our expectation of less natural gas use in the electric power sector on average this year compared with last year.
Electricity generation. Although we expect the U.S. power sector will generate 2% more electricity this year than it did in 2024, we forecast generation from U.S. natural gas-fired power plants will decline by 3% in 2025, partially driven by rising natural gas prices. Less generation from natural gas contributes to a 6% increase in generation from coal. U.S. solar generation continues to provide the largest increases in electricity generation in our forecast, increasing by 34% in 2025 and 18% in 2026.
Despite rising seasonal demand for natural gas heading into summer, our forecast for the 3Q25 Henry Hub price is almost double the price from a year earlier and is contributing to our expectation of less natural gas use in the electric power sector on average this year compared with last year.
Electricity generation. Although we expect the U.S. power sector will generate 2% more electricity this year than it did in 2024, we forecast generation from U.S. natural gas-fired power plants will decline by 3% in 2025, partially driven by rising natural gas prices. Less generation from natural gas contributes to a 6% increase in generation from coal. U.S. solar generation continues to provide the largest increases in electricity generation in our forecast, increasing by 34% in 2025 and 18% in 2026.