BAKU, Azerbaijan, June 14. The US Energy Information Administration (EIA) anticipates an increase in the Henry Hub natural gas spot price this summer, projecting an average of just over $2.60 per million British thermal units (MMBtu) for 3Q24, Trend reports.
According to the agency's data, this marks a rise from the $2.12/MMBtu average recorded in May.
This price uptick is expected due to relatively stable production levels in the latter half of 2024, combined with a seasonal increase in demand from the electric power sector. Consequently, storage injections are predicted to remain below the five-year average (2019-2023), which will help support higher prices. Injections during the first two months of the injection season (April-October) have averaged 12 percent below the five-year average for this period.
Despite this, US storage inventories are starting the summer with an unusually high level of natural gas. While the forecast indicates a price increase for the summer months due to lower-than-average storage injections, inventories are expected to remain above the five-year average. This should keep prices below $3.00/MMBtu on average in 3Q24, comparable to the $2.59/MMBtu average seen in 3Q23.
At the end of May, natural gas storage inventories were 24 percent above the five-year average. The EIA forecasts that storage inventories will conclude the summer injection season on October 31 at 6 percent above the five-year average.
However, if US natural gas production falls short of the forecast or if consumption in the electric power sector to meet air-conditioning demand exceeds expectations, natural gas prices could rise higher than currently predicted.