BAKU, Azerbaijan, November 18. U.S. natural gas prices dropped in October as consumption declined from the previous month and production remained steady, according to the latest data from the U.S. Energy Information Administration (EIA), Trend reports.
The Henry Hub natural gas spot price averaged $2.20 per million British thermal units (MMBtu) in October, marking a 4% decrease from the September average of $2.28/MMBtu.
The EIA attributed the drop to a 14% reduction in consumption in the electric power sector, which saw a decline of 6 billion cubic feet per day (Bcf/d). However, the residential and commercial sectors offset the drop, contributing to a slight overall increase in demand. Despite the decrease in consumption from September, demand in the power sector was 13% above the five-year (2019-2023) average, driven by lower natural gas prices and extended summer-like conditions in some parts of the country that spurred higher air-conditioning use.
“While demand in the electric power sector fell last month, it remains strong compared to historical averages, particularly as low natural gas prices continue to influence usage,” said the EIA in a statement.
Looking ahead, the EIA expects a rise in natural gas prices, forecasting the Henry Hub price to average above $2.80/MMBtu in the first quarter of 2025. Prices are expected to climb further, with an annual average of $2.90/MMBtu in 2025, a 33% increase compared to 2024. This price increase is largely attributed to expected growth in liquefied natural gas (LNG) exports.
“LNG exports are projected to rise by nearly 2 Bcf/d next year, driven by robust global demand and continued expansion of export capacity,” the EIA noted. As the U.S. capitalizes on international demand for LNG, this surge in exports is expected to place upward pressure on domestic natural gas prices.
Natural gas storage inventories ended October 6% above the five-year average, providing some cushion against potential price volatility as colder weather approaches. The EIA’s outlook suggests that rising exports and seasonal shifts in demand will continue to drive U.S. natural gas market dynamics in the coming months.