Despite historically high levels of U.S. natural gas stocks, the United States Energy Information Administration (EIA), a government entity, announces a significant increase in prices for the 2024-2025 winter period. According to its forecasts, the average price at the Henry Hub will reach $2.99/MMBtu between December and March, compared to $2.23/MMBtu over the same period last year, representing a 34% increase.
The EIA emphasizes that this rise occurs in a context of stable production and colder-than-normal weather conditions in December, even though temperatures in the first quarter of 2025 are expected to be milder. End-of-winter projections estimate a total storage level of 1.92 trillion cubic feet (Tcf), 2% above the five-year average.
Gas Inventories and Withdrawal Forecasts
The U.S. entered the winter season with stocks of 3.92 Tcf, 6% above the 2019-2023 average. However, the EIA predicts significant withdrawals in December, reaching 590 billion cubic feet (Bcf), 34% more than the five-year average for that month. This decrease is attributed to increased demand due to colder temperatures and limited production.
Price and Production Trends
The agency revised upward its forecasts for natural gas prices in the first quarter of 2025, estimating an average of $2.95/MMBtu, compared to $2.45/MMBtu at the end of 2024. For the whole of 2025, prices are expected to stabilize around $2.95/MMBtu, supported by rising demand for liquefied natural gas (LNG) and a production recovery.
Indeed, the EIA anticipates an increase in dry gas production, expected to reach 103 billion cubic feet per day (Bcf/d) in 2025, driven by LNG export projects in the Permian and Eagle Ford regions, as well as expanded production in the Haynesville Basin.
LNG Exports and Long-Term Prospects
The EIA anticipates a 15% increase in LNG exports in 2025, reaching 14 Bcf/d. This growth will be supported by new projects, including those by Venture Global at Plaquemines LNG and Cheniere Energy at Corpus Christi. These strategic developments aim to meet growing international demand, particularly in Europe and Asia.
Impact on Electricity Consumption
In parallel, electricity demand will increase by 2% this winter, according to the EIA, driven by an estimated 6% rise in heating degree days. The residential and commercial sectors are expected to consume 3% and 2% more electricity, respectively, compared to last winter, supported by greater use of heating systems.
This increase in consumption is also reflected in wholesale electricity prices. In some regions, such as ISO-New England’s internal hub, price forecasts have been raised by 16%, reaching $76.32/MWh in the first quarter of 2025.
