Natural Gas

Prices: The front-month natural gas futures contract for delivery at the Henry Hub settled at $2.64 per million British thermal units (MMBtu) on April 1, 2021, which was down 14 cents/MMBtu from March 1, 2021 (Figure 8).

Natural gas futures prices averaged $2.62/MMBtu in March, a decrease of 29 cents/MMBtu from the February average, which was the highest monthly average since January 2019. EIA estimates March natural gas withdrawals were 62.3 Bcf, 65% less than the five-year (2016–20) average for March. The low March withdrawals partly reflected a decrease in natural gas demand. We estimate that natural gas consumption in March decreased to 84.4 billion cubic feet per day (Bcf/d), down 24.6 Bcf/d (23%) from February’s record levels and the lowest consumption for March since 2017. We expect prices will rise from March levels and the Henry Hub spot price will average $2.86/MMBtu for the final three quarters of 2021. We forecast higher prices will result from relatively low, albeit rising, U.S. natural gas production compared with previous years amid increases in U.S. natural gas exports.