Henry Hub daily natural gas spot price fell to record lows in February

The U.S. benchmark Henry Hub daily natural gas price averaged $1.50 per million British thermal units (MMBtu) on February 20, 2024, the lowest price in inflation-adjusted dollars since at least 1997, according to data from Refinitiv Eikon. High natural gas production, low natural gas consumption, and higher natural gas inventories than the previous five-year (2018–22) average contributed to prices declining for much of 2023 and the first two months of 2024.

U.S. dry natural gas production generally rose throughout 2023, averaging a record high of 105.7 billion cubic feet per day (Bcf/d) in December 2023, according to data from S&P Global Commodity Insights. Following a temporary decline in production in mid-January due to winter storm Heather, production has remained relatively high since January 26, averaging over 104.1 Bcf/d. Natural gas consumption in the U.S. residential and commercial sectors so far this winter heating season (November 1, 2023–March 31, 2024) averaged about 5% (2.0 Bcf/d) lower than the five-year (2019–23) average, at 35.8 Bcf/d.

Because of high production and relatively low consumption, less natural gas has been withdrawn from storage this winter. For the week ending February 16, U.S. working natural gas inventories averaged 12% above the year-ago average and nearly 22% above the five-year (2019–23) average, according to our Weekly Natural Gas Storage Report. Relatively high storage levels indicate an oversupplied market and contribute to lower natural gas prices.

Since February 7, the Henry Hub daily natural gas price has been below $2.00/MMBtu, reaching its lowest price on February 20; six of the record-low daily prices when adjusting for inflation occurred this month. The last time the Henry Hub price was this low was in 2020, when it averaged $2.05/MMBtu for the year. In 2020, low prices were largely due to the economic effects of the COVID-19 pandemic, including low natural gas consumption, and the mild 2019–20 winter, which ended with relatively high natural gas storage inventories.

Principal contributors: Andrew Iraola, Katy Fleury, Max Ober