Energy agency cuts winter gas price forecast to $2.87, down 16%
Key Facts
The U.S. Energy Information Administration cut its forecast for the average Henry Hub spot price of natural gas during the winter months to $2.87 per million British thermal units from November through March, according to its monthly report issued on November 10, 2026. The estimate is 16% below the previous month's forecast and 36% below last winter's average, a revision reflecting weaker weather-related demand and a higher inventory estimate. The agency completed its forecast on November 5 and set December 8 as the date for its next release. The new estimate puts a lower ceiling on average prices during the heating season, even as annual consumption and exports are expected to continue growing. The agency says production growth next year will exceed the increase in domestic demand and exports, keeping inventories above 2026 levels on average.
A warm start to November was among the main factors prompting the agency to lower its forecast, as it expects U.S. heating degree days for the month to be 13% below the 10-year average. Heating degree days are an indicator of the energy needed for heating, so a decline is associated with lower gas consumption in homes and commercial buildings. The agency projected inventories of 3,840 billion cubic feet at the end of November, up 67 billion cubic feet from its estimate the previous month. That means supplies available for the rest of the heating season appear higher than expected in the previous forecast. The inventory revision coincides with a lower winter price estimate, reflecting the effect of weaker demand on the supply-demand balance.
The agency expects residential and commercial sector consumption to average 36.4 billion cubic feet per day during the heating season running from November through March in 2026–2027, down 3.8% from the previous winter. The decline is tied to expectations for warmer weather and represents the clearest effect of reduced heating needs on seasonal demand. For the year as a whole, the agency expects total U.S. gas consumption to rise from 92.35 billion cubic feet per day in 2026 to 94.42 billion in 2027. The gap between the two trajectories shows that higher annual consumption does not prevent heating demand from falling during the winter months. But winter estimates remain sensitive to the timing and severity of cold spells.
Production growth is another factor in the price outlook: the agency expects U.S. dry natural gas production to rise from 113.01 billion cubic feet per day in 2026 to 117.61 billion in 2027. According to its report, production growth will exceed the increase in demand from domestic consumers and exports, leaving inventories about 3% above 2026 levels on average during 2027. That balance translates into a forecast average Henry Hub price of $2.88 per million British thermal units in 2027, compared with $3.37 in 2026. The agency links this outlook to increased supply, while demand and exports continue to grow at the same time. As a result, it expects the average annual price in 2027 to remain below its projected level for the previous year.
Meanwhile, U.S. liquefied natural gas exports are expanding as new export capacity comes online. The agency expects exports to average 17.6 billion cubic feet per day in 2026, then 19.0 billion in 2027, after 15.1 billion in 2025. It attributes the increase to the ramp-up of new export capacity, adding a source of demand for U.S. gas alongside domestic consumption. The agency said the seventh and final train at the Corpus Christi Stage 3 facility completed substantial work in late August, with nameplate capacity of 1.5 billion cubic feet per day. This is part of the export capacity expansion that the agency expects to lift shipments over the next two years.
Weather forecasts remain a factor that could alter the demand trajectory in the coming months, with the agency forecasting above-average temperatures across the northern United States from December through February. But it said the timing and severity of cold spells are uncertain, and severe cold snaps in January and February could temporarily push demand and prices above its forecasts. Its monthly estimates show variation across the season: January heating degree days are expected to be 10% below the previous year, alongside a similar decline in residential and commercial gas consumption. In March, it expects heating degree days to increase 31% and residential and commercial consumption to rise 17% compared with the previous winter. The agency expects higher demand in March to partly offset lower consumption in these sectors from November through February, with its next report due on December 8.