The US started the winter season with 6% more natural gas in storage than average, and EIA forecasts in its December Short-Term Energy Outlook (STEO) that natural gas inventories will remain 2% above the five-year average at the end winter.
“Recent natural gas prices have been historically low, so a colder winter than last will draw on storage and raise prices to some extent,” said EIA Administrator, Joe DeCarolis. “We expect natural gas prices will remain well below the high prices we saw in 2021 and 2022.”
EIA expects US benchmark Henry Hub natural gas spot price to increase from just above US$2.00 per million Btu in November to an average of about US$3.00/million Btu for the rest of the winter heating season.
Other highlights from the December STEO include:
Oil production: EIA expects the extension of OPEC+ oil production cuts announced on 5 December 2024 to cause global oil inventories todecrease by about 700 000 bpd in the 1Q25. After the first quarter, additional OPEC+ production and continued supply growth outside of OPEC+ should reverse the trend of decreasing inventory, and EIA expects inventory to grow by about 100 000 bpd over the remainder of the year.
Oil prices: EIA expects that inventory builds will put some downward pressure on crude oil prices in the second half of 2025; EIA expects the Brent crude oil spot price to fall from an average US$74 per barrel in the 1Q25 to an average US$72/bbl in the 4Q25.
Future Short-Term Energy Outlooks: The January STEO will be the first month that extends forecasts through 2026.