The U.S. Energy Information Administration (EIA) has increased its natural gas price forecast by 40% due to record storage withdrawals this winter.
Natural gas prices averaged $7.72 U.S. per million British thermal units (MMBtu) in January as cold weather across North America boosted heating demand and led to the largest weekly storage withdrawal on record.
Consequently, the EIA is forecasting short-term natural gas prices will rise 40% through the end of February.
The price increase is expected as U.S. natural gas inventories are forecast at less than 1.9 trillion cubic feet, 8% below previous forecasts, by the end of March this year.
"We expect higher prices in the near term will increase drilling, resulting in higher production later this year and helping to replenish storage," said the EIA in a news release.
Despite the near-term price increase, the EIA lowered its longer-term forecast for natural gas prices.
The agency now expects natural gas prices to average $4.30 U.S. per MMBtu in 2026 and $4.40 U.S. per MMBtu in 2027, which is 5% lower than its previous forecast.
U.S. natural gas production declined 3% from December to January due to severe winter weather, but the EIA expects most production to return this spring.
Production is forecast to increase further in the second half of 2026 as new pipeline capacity comes online and producers respond to higher prices with increased drilling.
COMTEX_473338884/2797/2026-02-11T12:40:23