https://www.naturalgasintel.com/eia-slashes-2023-henry-hub-forecast-as-supply-growth-seen-outpacing-demand/ The “significantly warmer-than-normal” weather in January depressed space heating demand and padded storage inventories, EIA said in its latest Short-Term Energy Outlook (STEO), published Tuesday.
The latest STEO modeled an average Henry Hub spot price of $3.40/MMBtu for 2023, reflecting a steep 30% decline versus agency projections only a month ago. Prices should remain below the $4 mark until December, researchers said.
What’s more, recent futures trading implies that, if anything, EIA’s forecast might be too optimistic. The March Nymex contract was hovering near $2.50 as midday Tuesday, off nearly $1 versus EIA’s projected 2023 average.
As heating degree days came in 16% below the 10-year average in January, Henry Hub spot prices averaged $3.27, down more than $2 compared to December prices, according to EIA.
“Natural gas prices remain very volatile,” researchers said. “Extreme weather events and production freeze-offs could still potentially cause price spikes at both the Henry Hub and in regional markets, but that potential diminishes as spring approaches, particularly now that inventories have moved back above the five-year average.”