The US Energy Information Administration (EIA) recently released its short-term energy outlook, highlighting a significant increase in natural gas demand that is surpassing supply. This trend is anticipated to drive up gas prices in 2025 and 2026 compared to 2024, when spot prices averaged $2.19 per million British thermal units (MMBtu).
The EIA projects that Henry Hub spot prices will average $4.02 per MMBtu in 2025 and rise to $4.88 in 2026. The agency notes that domestic gas consumption and exports will grow by nearly 4 billion cubic feet per day (Bcf/d), while US dry natural gas production will increase by less than 3 Bcf/d.
Even with recent inventories exceeding the five-year average, the EIA expects that persistent demand will lead to a decline in inventories below that average by October, placing upward pressure on prices. For production, the EIA estimates an average of 115.9 Bcf/d in 2025, an increase from previous forecasts.
However, the 2026 forecast has been adjusted downward to 116.3 Bcf/d, primarily due to a decline in drilling activity in key oil-producing areas like the Eagle Ford Basin. In terms of consumption, the EIA maintains its 2025 consumption forecast at 91.3 Bcf/d and raises the 2026 forecast to 91.1 Bcf/d.
The growing demand is partly attributed to a significant rise in liquefied natural gas (LNG) exports, anticipated to increase from 11.9 Bcf/d in 2024 to 14.6 Bcf/d in 2025. Additionally, electricity demand is expected to rise, particularly in commercial and industrial sectors due to data center expansions.
The EIA anticipates a 3% increase in electricity consumption in the commercial sector for 2025 and has revised its outlook for total US electricity generation to increase by 1% this summer compared to 2024. As solar and hydroelectric generation methodologies become more predominant, there is a corresponding decrease in gas-fired generation in various regions.