BAKU, Azerbaijan, July 10. U.S. natural gas prices are set to decline in the coming months, as rising production and softening demand from the power sector lead to higher-than-expected storage levels, according to the latest Short-Term Energy Outlook from the U.S. Energy Information Administration (EIA), Trend reports.
The report, published this week, notes a significant shift from the agency’s June forecast, with natural gas inventories now expected to finish the injection season at 3,910 billion cubic feet (Bcf) by October 31 — about 5% more than previously projected and 3% above the five-year average for 2020–2024.
The upward revision in storage expectations comes on the back of seven consecutive weeks of robust injections, each surpassing 100 Bcf between late April and early June. These additions helped inventories recover from a three-year low at the end of the winter withdrawal season, when levels sat 4% below the five-year average.
“Increased production in the second quarter of 2025, compared to the first quarter, and reduced power sector consumption have both contributed to the stronger-than-anticipated build in natural gas storage,” the EIA said.
As a result, the agency has lowered its price outlook. The Henry Hub spot price averaged just over $3.00 per million British thermal units (MMBtu) in June. Prices are now expected to average $3.40/MMBtu in the third quarter of 2025 — down 16% from last month’s forecast.
Still, the EIA cautions that volatility remains possible. Natural gas prices could move higher than expected if liquefied natural gas (LNG) demand exceeds projections or if production underperforms. Conversely, disruptions to LNG exports, particularly from hurricanes targeting the Gulf Coast this summer, could push storage levels even higher and put further downward pressure on prices.
“LNG demand and production levels will be key factors in determining market balance in the months ahead,” the agency said, noting that any deviation from current forecasts could have material impacts on pricing and inventory levels.
The EIA’s revised forecast reflects the complex interplay of domestic supply dynamics, weather patterns, and global energy demand — all of which continue to shape the outlook for U.S. natural gas markets.
