EIA Cuts 2027 Henry Hub Price Forecast to $2.88 as Inventories Remain Ample
Key Facts
The U.S. Energy Information Administration cut its forecast for the 2027 average natural gas price at Henry Hub to $2.88 per million British thermal units, compared with $3.37 forecast for 2026. In its October outlook, the agency estimated the 2027 average at $3.16, 9% below its forecast for 2026 at the time. The November update reflects weaker near-term price expectations, with the agency estimating an average spot price of $2.87 from November through March. That winter average is 16% below the previous month’s estimate and 36% below last winter’s average. The agency issued its forecast on November 10, after completing it on November 5.
The EIA linked pressure on prices to a warm start to November, assuming U.S. heating degree days would be 13% below the 10-year average for the month. The agency also forecast that heating degree days this winter would be 1% below the previous winter. In January, those days are expected to decline 10% year over year, alongside a 10% drop in gas consumption by the residential and commercial sectors. For the 2026–2027 heating season, the agency expects consumption by those sectors to average 36.4 billion cubic feet per day, down 3.8% from the previous winter. This estimate puts weaker heating-related demand at the forefront of the factors behind the lower winter price outlook.
Storage estimates suggest ample supply will remain a drag on prices, with the agency forecasting U.S. inventories will reach 3,840 billion cubic feet by the end of November. That is 67 billion cubic feet above its estimate the previous month. Working gas in storage stood at 3,801 billion cubic feet on October 30, according to the EIA estimate. More broadly, the agency expects gas production to grow faster than domestic demand and exports, keeping inventories an average of about 3% above 2026 levels. In its forecast, it said, "Production growth outpaces increases in demand from domestic sources and exports," leaving inventories above year-earlier levels.
Weak winter consumption coincides with expectations for higher U.S. demand in 2027 year over year. The agency estimated total natural gas consumption at 94.42 billion cubic feet per day in 2027, compared with 92.35 billion in 2026. It also forecast dry gas production to increase from 113.01 billion cubic feet per day in 2026 to 117.61 billion in 2027. These figures show that demand growth does not offset the effect of rising supply in the market balance underlying the price outlook. Annual consumption can therefore rise while the average price forecast remains lower if production expands faster.
The EIA forecast U.S. liquefied natural gas exports would rise to 17.6 billion cubic feet per day in 2026, then to 19.0 billion in 2027, compared with 15.1 billion in 2025. The agency attributed the increase to new export capacity beginning to ramp up. At the same time, it said international natural gas prices had risen to their highest levels since December 2022, supporting the economics of U.S. LNG exports. This highlights a divergence between the domestic market outlook, which is affected by rising production, weather and winter demand, and export returns, which benefit from international price levels. Exports remain a source of U.S. demand growth even as inventories are expected to remain above 2026 levels.
The November forecast sets out a lower annual price path in 2027, alongside a winter spot price estimate below both the previous month’s forecast and last winter’s average. The agency’s estimates for weather, consumption, production and storage remain interconnected in its view of the market’s trajectory, with production growth expected to outpace growth in domestic demand and exports. LNG exports are forecast to continue rising as new capacity comes online, supported by higher international prices. The EIA is scheduled to issue its next Short-Term Energy Outlook update on December 8, 2026. It completed its November forecast on November 5 before publishing it on November 10.