Short-Term Energy Outlook

Natural Gas

In May, the Henry Hub natural gas spot price averaged $1.75 per million British thermal units (MMBtu). EIA forecasts that relatively low natural gas demand will keep spot prices lower than $2/MMBtu through August. However, EIA expects prices will generally rise through the end of 2021. EIA expects that natural gas price increases will be sharpest this fall and winter when they rise from an average of $2.06/MMBtu in September to $3.08/MMBtu in January. Despite EIA’s forecast of record end-of-October storage levels, EIA expects that rising demand heading into winter, combined with reduced production, will cause upward price pressures. EIA forecasts that Henry Hub natural gas spot prices will average $2.04/MMBtu in 2020 and $3.08/MMBtu in 2021.

EIA expects that total U.S. consumption of natural gas will average 81.9 billion cubic feet per day (Bcf/d) in 2020, down 3.6% from 2019. The decline primarily reflects less consumption in the industrial-sector, which EIA forecasts will average 21.0 Bcf/d in 2020, down 8.7% from 2019 as a result of reduced manufacturing activity.

U.S. dry natural gas production set a record in 2019, averaging 92.2 Bcf/d. EIA forecasts dry natural gas production will average 89.7 Bcf/d in 2020, with monthly production falling from 96.2 Bcf/d in November 2019 to 83.6 Bcf/d in March 2021, before increasing slightly. Natural gas production declines the most in the Appalachian and Permian regions. In the Appalachian region, low natural gas prices are discouraging producers from engaging in natural gas-directed drilling, and in the Permian region, low crude oil prices reduce associated natural gas output from oil-directed wells. In 2021, EIA’s forecast production of dry natural gas in the United States averages 85.4 Bcf/d. EIA expects production to begin rising in the second quarter of 2021 in response to higher prices.

EIA estimates that total U.S. working natural gas in storage ended May at almost 2.8 trillion cubic feet (Tcf), 18% more than the five-year (2015–19) average. In the forecast, inventories rise by 2.1 Tcf during the April-through-October injection season to reach more than 4.1 Tcf on October 31, which would be a record.

EIA forecasts that U.S. liquefied natural gas exports will average 5.6 Bcf/d in the second quarter of 2020 and 3.7 Bcf/d in the third quarter of 2020. EIA expects that U.S. liquefied natural gas exports will decline through the end of the summer as a result of reduced global demand for natural gas.

U.S. Natural Gas Summary
	2018	2019	2020projected	2021projected
Prices	(dollars per thousand cubic feet)
Henry Hub Spot	3.27	2.66	2.12	3.20
Residential Sector	10.46	10.56	10.46	10.67
Commercial Sector	7.77	7.62	7.26	7.80
Industrial Sector	4.21	3.91	3.16	4.24
Supply	(billion cubic feet per day)
Marketed Production	89.93	99.17	96.79	92.40
Dry Gas Production	83.80	92.21	89.65	85.39
Pipeline Imports	7.70	7.37	7.06	7.92
LNG Imports	0.21	0.14	0.18	0.22
Consumption	(billion cubic feet per day)
Residential Sector	13.69	13.70	12.96	13.35
Commercial Sector	9.63	9.65	9.14	9.30
Industrial Sector	22.95	22.98	20.98	21.61
Electric Power Sector	29.01	30.98	31.52	27.21
Total Consumption	82.40	84.97	81.87	78.66
Primary Assumptions	(percent change from previous year)
Heating Degree Days	11.8	0.6	-7.1	3.8
Cooling Degree Days	11.0	-5.2	-4.4	-1.4
Commercial Employment	1.5	1.4	-15.6	5.4
Natural-gas-weighted Industrial Production	2.6	-0.4	-10.6	3.7

Provides custom data views of historical and forecast data

STEO Data browser ›
Real Prices Viewer ›

Related Tables
Table SF01. U.S. Motor Gasoline Summer Outlook	PDF
Table SF02. Average Summer Residential Electricity Usage, Prices and Expenditures	PDF
Table 1. U.S. Energy Markets Summary	PDF
Table 2. Energy Prices	PDF
Table 5a. U.S. Natural Gas Supply, Consumption, and Inventories	PDF
Table 5b. U.S. Regional Natural Gas Prices	PDF
Table 8a. U.S. Renewable Energy Consumption	PDF
Table 8b. U.S. Renewable Electricity Generation and Capacity	PDF
Table 9a. U.S. Macroeconomic Indicators and CO₂ Emissions	PDF
Table 9b. U.S. Regional Macroeconomic Data	PDF
Table 9c. U.S. Regional Weather Data	PDF

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

Related Articles
Today In Energy	Daily
Natural Gas Weekly Update	Weekly
Peak Underground Working Storage Capacity	Annual
2020 Summer Fuels Outlook	Apr-2020	PDF
Weather Sensitivity in Natural Gas Markets	Oct-2014	PDF
Energy-weighted industrial production indices	Mar-2014	PDF
Change in STEO Regional and U.S. Degree Day Calculations	Sep-2012	PDF
2012 Outlook for Hurricane-Related Production Outages in the Gulf of Mexico	Jun-2012	PDF
Changes in Natural Gas Monthly Consumption Data Collection and the Short-Term Energy Outlook	Dec-2010	PDF
Trends in U.S. Residential Natural Gas Consumption	23-Jun-2010	PDF
Probabilities of Possible Future Prices	Apr-2010	PDF
Energy Price Volatility and Forecast Uncertainty	Oct-2009	PDF