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Short-Term Energy Outlook

Release Date: April 6, 2021  |  Forecast Completed: April 1, 2021  |  Next Release Date: May 11, 2021  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Natural Gas

  • In March, the U.S. benchmark Henry Hub natural gas spot price averaged $2.62 per million British thermal units (MMBtu), which is down from the February average of $5.35/MMBtu. The Henry Hub price declined primarily because the cold weather and related high demand and market disruptions that drove prices to recent highs in February abated in March. EIA expects Henry Hub spot prices will average $2.73/MMBtu in the second quarter of 2021 and will average $3.04/MMBtu for all of 2021, which is up from the 2020 average of $2.03/MMBtu. We expect that continued growth in liquefied natural gas (LNG) exports, with only a slight corresponding increase in dry natural gas production, will contribute to the average Henry Hub spot price rising to $3.11/MMBtu in 2022.
  • EIA expects that U.S. consumption of natural gas will average 82.9 billion cubic feet per day (Bcf/d) in 2021, down 0.4% from 2020. The decline in U.S. natural gas consumption is a result of less natural gas consumed for electric power generation because of higher natural gas prices compared with last year. In 2021, we expect residential and commercial natural gas consumption will rise by a total of 1.1 Bcf/d from 2020 and industrial consumption will rise by 1.4 Bcf/d from 2020. Rising consumption outside of the power sector results from expanding economic activity and colder temperatures in 2021 compared with 2020. We expect U.S. natural gas consumption will average 82.1 Bcf/d in 2022.
  • EIA estimates that natural gas inventories ended March 2021 at nearly 1.8 Tcf, which is 2% lower than the five-year (2016–20) average. The winter of 2020–21 had more natural gas withdrawn from storage than the five-year average largely as a result of the cold February temperatures that occurred amid low natural gas production. We expect that rising natural gas production and lower natural gas consumption for power generation than in the past two summers will contribute to storage injections outpacing the five-year average in 2021. We forecast that natural gas inventories will end the 2021 injection season (end of October) at more than 3.7 Tcf, which is equal to the five-year average.
  • EIA forecasts that U.S. production of dry natural gas will average 91.4 Bcf/d in 2021, which is about the same as the 2020 average. In our forecast, dry natural gas production falls to a low point of 90.8 Bcf/d in May 2021 before steadily increasing through most of the remainder of 2021, reaching a high of 92.4 Bcf/d in November 2021. The increase in production in 2021 reflects higher forecast natural gas prices as well as higher forecast crude oil prices, which we expect will contribute to more associated natural gas production, especially in the Permian region.

U.S. natural gas consumption

U.S. marketed natural gas production

U.S. natural gas trade

Henry Hub natural gas price

U.S. Natural Gas Summary
Prices (dollars per thousand cubic feet)
Henry Hub Spot 2.672.113.153.23
Residential Sector 10.4610.8311.0411.00
Commercial Sector 7.597.487.987.89
Industrial Sector 3.903.294.234.29
Supply (billion cubic feet per day)
Marketed Production 100.0498.8498.90101.02
Dry Gas Production 93.0691.3691.4193.29
Pipeline Imports 7.376.847.086.69
LNG Imports
Consumption (billion cubic feet per day)
Residential Sector 13.7412.7013.2313.01
Commercial Sector 9.628.609.189.12
Industrial Sector 23.0722.5623.9124.19
Electric Power Sector 30.9331.7428.8327.72
Total Consumption 85.1583.2682.9382.07
Primary Assumptions (percent change from previous year)
Heating Degree Days 0.6-
Cooling Degree Days -5.21.6-5.6-1.0
Commercial Employment 1.4-
Natural-gas-weighted Industrial Production -0.4-

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Related Figures
Henry Hub natural gas price XLSX PNG
U.S. natural gas prices XLSX PNG
U.S. marketed natural gas production XLSX PNG
U.S. natural gas consumption XLSX PNG
U.S. natural gas balance XLSX PNG
U.S. natural gas trade XLSX PNG
U.S. working natural gas in storage XLSX PNG
U.S. electricity generation by fuel, all sectors XLSX PNG
U.S. carbon dioxide emissions growth XLSX PNG
U.S. winter heating degree days XLSX PNG
U.S. census regions and census divisions XLSX PNG
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