EIA Sept. STEO Cuts NatGas Spot Price Another $0.10 to $3.50 in ’25
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. Read More “EIA Sept. STEO Cuts NatGas Spot Price Another $0.10 to $3.50 in ’25”
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? 
The U.S. Energy Information Administration (EIA) issued its latest monthly Short-Term Energy Outlook (STEO) last week. The STEO is the agency’s monthly best guess about where energy prices and production will head in the next 12 months. We joke about the predictions coming from a dartboard, given their seemingly random ups and downs. In this latest assessment, EIA dropped its estimates for the Henry Hub spot price for 2025, again. The agency expects the HH price to average $3.60 per million British thermal units (MMBtu) in 2025, $0.10 lower than last month’s forecast. EIA also dropped its 2026 forecast, now believing the gas price will average $4.30/MMBtu, down $0.10 from last month’s $4.40 (and WAY down from the estimate two months ago of $4.90 next year). 
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. 
In yesterday’s MDN post about the spike in the NYMEX futures price for natural gas, MDN told you that traders were targeting the next significant trading target to be $3.84/MMBtu (see 
We experienced a nice jolt in the NYMEX futures price for natural gas yesterday, rising 16.7 cents to close at $3.748/MMBtu. Those in the know say the main factors behind the price increase were (a) a hot weather forecast beginning next week for the eastern half of the country, and (b) lingering uncertainty over the Israel-Iran war and its potential impact on oil and LNG shipments in the Persian Gulf. 
Banks remain confident in long-term energy fundamentals despite significant trade policy turbulence, according to the Spring 2025 Haynes Boone Energy Bank Price Deck Survey (full copy below). The survey, now in its 12th edition, is a leading source of information for energy lenders and producers, providing crucial details on commodity price expectations. Based on internal data from 28 banks, the latest survey indicates that while oil and gas prices have fluctuated in the short term, long-term forecasts remain consistent with past projections, suggesting that banks view recent economic changes as temporary. Banks expect natural gas prices to stay strong, in the $3.50-$3.75/MMBtu range through 2026, due to high LNG export demand and growing energy needs from artificial intelligence infrastructure. 
Here’s a third natural gas price prediction, from Morningstar DBRS, a top company that gives independent credit ratings and opinions for businesses, governments, banks, and financial projects worldwide. Earlier this week, Morningstar published a commentary/report called: “Summer Heat Likely to Add to High LNG Export Demand, Tightening the North American Gas Market” (full copy below). In the report, Morningstar analysts write that they expect the North American natural gas supply and demand balance to tighten from summer heat-driven peak electricity demand and expanding LNG exports, supporting higher bids for spot gas prices. Analysts believe the average price for natural gas will hit $3.50/MMBtu both in 2025 and in 2026.