EIA Oct. STEO Cuts NatGas Spot Price by $0.40 to $3.90 for 2026
The U.S. Energy Information Administration (EIA) issued its latest monthly Short-Term Energy Outlook (STEO) yesterday. The STEO is the agency’s monthly best guess about where energy prices and production will head in the next 12 months. In this latest assessment, EIA dropped its estimates for the Henry Hub spot price for 2025, again, as it has for months. The agency expects the HH spot price to average $3.40 per million British thermal units (MMBtu) in 2025, $0.10 lower than last month’s forecast (and $0.30 below the prediction from three months ago). EIA also dropped its 2026 forecast, quite radically, lowering it by $0.40 to $3.90/MMBtu. Hence, our suspicion that sometimes the data crunchers haul out the breakroom dartboard to help with forecasts. Read More “EIA Oct. STEO Cuts NatGas Spot Price by $0.40 to $3.90 for 2026”
Although we’re seeing an increase in both natural gas demand and production, combining these factors with relatively normal winter weather, economic indicators and natural gas storage levels, the Natural Gas Supply Association (NGSA) is projecting “flat” pressure on natural gas prices compared to last winter, according to the NGSA’s annual Winter Outlook forecast of the wholesale winter natural gas market (full copy below). The NGSA 2025-2026 Winter Outlook, a forecast of the wholesale winter natural gas market, compared the upcoming winter to the winter of 2024-2025 when the average Henry Hub price of natural gas was $3.76 per MMBtu. “Winter” is defined as the period from November through March, the industry’s traditional winter heating season. 
Yesterday, the NYMEX “front month” futures contract for natural gas declined once again, marking four consecutive days of losses. The NYMEX price fell 8.20 cents per million British thermal units (MMBtus) to $2.806 per MMBtus. Why the slide? The best thinking we could find says (a) the weather isn’t warm or cold enough to draw down stocks, and (b) we have more than enough extra gas sitting in inventory. Classic economics 101 states that a surplus of supply over demand results in falling prices. How much longer will the price continue to decline? Gas traders speculate that the short-term outlook is “bearish,” meaning the price will continue to decline. However, in the not-too-distant future, they predict a turnaround and higher prices. 
It finally happened. After the front-month NYMEX natural gas futures price closed above $3 on September 2, it once again sank below a $3 closing price at yesterday’s close. The price closed down 9.5 cents yesterday at $2.934 per million British thermal units (MMBtus). On the bright side, the price is still 8.8% higher than the lowest price (so far) in 2025, which was $2.696 hit on Monday, Aug. 25. Where do we go from here? And, is the futures price affecting regional spot prices in the Marcellus/Utica? 
According to the Financial Times (of London), the world’s biggest oil and gas companies are cutting jobs, slashing costs, and scaling back investments at the fastest pace since the coronavirus market collapse, as executives brace for a prolonged period of lower crude prices. The reason for the cuts is low oil prices, which FT says have hit the U.S. shale industry “particularly hard.” There is no denying that the price has steadily sunk to new lows each month over the past year. However, we now appear to be entrenched in the $60s, although that could change. 
The U.S. Energy Information Administration (EIA) issued its latest monthly Short-Term Energy Outlook (STEO) yesterday. The STEO is the agency’s monthly best guess about where energy prices and production will head in the next 12 months. In this latest assessment, EIA dropped its estimates for the Henry Hub spot price for 2025, again. The agency expects the HH spot price to average $3.50 per million British thermal units (MMBtu) in 2025, $0.10 lower than last month’s forecast (and $0.20 below the prediction from two months ago). EIA kept its 2026 forecast the same, predicting the gas price will average $4.30/MMBtu. 
U.S. natural gas futures rose for a sixth consecutive session, with production lower, LNG feedgas flows holding up, and the weather forecast calling for higher temperatures. The NYMEX “front month” futures contract for October settled up 1.8% at $3.064/MMBtu. Traders think that the price will move in the upward direction for a while (let’s hope so). However, we aren’t out of the woods just yet. As for the physical spot price of natural gas, the Henry Hub spot price yesterday closed at $2.895, up 27 cents from the previous day. A very nice bump. What about the spot price around the Marcellus/Utica? 
We spotted a Financial Times article with an intriguing title: Opec oil ‘price war’ will halt shale boom, say US producers. The FT is the UK equivalent of our Wall Street Journal. Although it tilts a bit left, the reporting is usually pretty reliable, so we trust it (for the most part). We learned a few important things from this article. First is that the break-even price for U.S. shale drillers to make a profit is $65 per barrel. If oil remains below that point, new drilling stops. Second, one producer claimed his company would not “put any more rigs out” until prices get back to, and stabilize at, $75 per barrel. 
Yesterday, the “front month” contract (for September) for the NYMEX futures natural gas price crashed down 15.1 cents to close at $2.932/MMBtu. Bummer. The $3 level is an important psychological barrier, and we just violated it. The questions, as always, are (1) why did the price go lower (what’s rattling around inside the heads of traders); and (2) where is the price likely to go next? We aim to try to answer those questions in this post. 
Freeport LNG has become something of a punchline with respect to the frequent outages experienced at the facility. Except, it’s no laughing matter. Outages at Freeport have happened so frequently that we’ve lost count. Wednesday, the facility was offline again, affecting gas flows to (and from) the facility on Wednesday and Thursday. This time, the reason for the outage was that power to the City of Freeport and surrounding communities, including the LNG plant, was out. Which raises the question, doesn’t Freeport LNG have a backup generator for times like that? Apparently not. When Freeport goes down, it affects natural gas prices here at home and around the world. Yes, this one facility has that kind of impact. 
The NYMEX “front month” futures contract for natural gas (August contract) slid lower yesterday for a second day in a row. The price dropped 12.6 cents per million British thermal units (MMBtus), or nearly 4%, to $3.214 yesterday. The price was down 19.8 cents (nearly 6%) over the past two days. According to one analyst (whom we trust), this “decisive breakdown” in natural gas puts the $3.10 support level at risk, opening the path to deeper downside targets, including $2.97 and $2.79. Yuck.