The U.S. Energy Information Administration (EIA) expects wholesale natural gas prices to rise in 2025 and 2026 as demand outpaces supply, largely driven by increased exports from liquefied natural gas (LNG) facilities.
In its January Short-Term Energy Outlook (STEO), the EIA forecasts the Henry Hub natural gas spot price to average $3.10 per million British thermal units (MMBtu) in 2025 and $4.00/MMBtu in 2026, recovering from record lows in 2024.
According to the EIA, total natural gas demand, including domestic consumption and exports, is projected to grow by 3.2 billion cubic feet per day (Bcf/d) in 2025—nearly 3% higher than 2024 levels. In contrast, supply, including domestic production and imports, is expected to increase by only 1.4 Bcf/d. This imbalance is predicted to push Henry Hub prices up by 43% in 2025.
By 2026, the EIA anticipates demand will continue to rise, outpacing supply once again. Total demand is forecast to grow by an additional 2.6 Bcf/d, leading to a 27% price increase.
LNG Exports Driving Demand
The demand surge is largely attributed to new LNG export facilities coming online. The EIA forecasts LNG exports to grow by 2.1 Bcf/d in both 2025 and 2026, with facilities like Plaquemines LNG, Corpus Christi Stage 3, and Golden Pass LNG playing a significant role. Plaquemines LNG and Corpus Christi Stage 3 are expected to ramp up operations through the period, while Golden Pass LNG is anticipated to begin operations by mid-2026.
Domestic natural gas consumption is expected to remain flat over the next two years. While power sector demand is projected to decline due to rising natural gas prices and increasing renewable energy generation, residential and commercial consumption is expected to grow by 7% in 2025, driven by a return to average winter temperatures. Industrial demand is forecast to rise in 2026, supported by increased manufacturing activity.
Supply Growth Focused on Permian and Haynesville
Supply increases will primarily come from dry natural gas production in the Permian and Haynesville regions, according to the EIA. Production is expected to rise by 1% to 104.5 Bcf/d in 2025 and nearly 3% to 107.2 Bcf/d in 2026. Growth in the Permian region will largely come from associated gas production tied to crude oil output, while Haynesville growth in 2026 will be driven by higher natural gas prices and new LNG export projects along the Gulf Coast.
The EIA notes that U.S. natural gas inventories remained above their rolling five-year averages throughout 2023 and 2024, contributing to record-low spot prices. However, with demand projected to exceed supply starting in 2025, inventories are expected to fall below average levels, further supporting higher prices through 2026.