According to the U.S. Energy Information Administration (EIA) website article published on February, 2023:
Natural gas prices: Temperatures across the United States in January were the mildest since 2006, which reduced consumption of natural gas for space heating and significantly changed the forecast for natural gas markets in the coming months. The Henry Hub spot price averaged $3.27 per million British thermal units (MMBtu) in January, down more than $2/MMBtu from December. In the United States, there were 16% fewer heating degree days (HDDs) in January than the 10-year average and 9% fewer than forecast in the January STEO. With less-than-expected consumption of natural gas, U.S. stocks of natural gas ended January above the previous forecast.
These developments in January contributed to significant changes in the outlook for the February STEO. EIAnow forecast Henry Hub natural gas prices to average about $3.40/MMBtu for 2023 and to stay below $4.00/MMBtu until December. the forecast in the January STEO was for Henry Hub prices to average almost $5.00/MMBtu in 2023.
Natural gas prices remain very volatile. 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 (2018–2022) average. Although EIAexpect close-to-normal weather for February and March, colder temperatures than expected could put upward pressure on prices. The Freeport LNG export facility, which went offline in June due to a fire, is expected to come back online in the first quarter of 2023 and will likely add over 2 billion cubic feet per day (Bcf/d) of natural gas demand to the U.S. market once fully operational.
Natural gas markets: U.S. natural gas production growth has been outpacing demand growth the past several months, helping reduce natural gas prices. EIA estimate that dry natural gas production in the United States averaged 100.2 Bcf/d in January. EIA forecasts dry natural gas production to continue to hover around 100 Bcf/d for most of this year; overall, EIA expects dry natural gas production to average between 100 Bcf/d and 101 Bcf/d in 2023. U.S. consumption of natural gas was below average in January because very mild weather reduced demand for space heating. EIA expect less demand for natural gas than last year for most of 2023 due to decreased demand in the electric power sector as more renewable electric generation sources come online throughout the year and due to decreased demand in the industrial sector as a result of an expected drop in manufacturing activity. EIA expects utilization at U.S. liquefied natural gas (LNG) export facilities to be slightly lower in the next few months compared with the previous forecast because of high natural gas stock levels in Europe. But U.S. LNG exports in the forecast rise once the Freeport facility is back online, and LNG exports increase by 11% (1.2 Bcf/d) on an annual basis in 2023 compared with 2022.
Natural gas storage: EIA forecasts that natural gas storage inventories will end the withdrawal season (November through March) at more than 1.8 trillion cubic feet (Tcf), which would be 16% above the five-year average and 19% more than EIA had forecast in the January STEO. The warmer-than-normal January temperatures reduced natural gas storage withdrawals below average, causing storage inventories to rise above the five-year (2018–2022) average at the end of January. EIA expects above average storage inventories to reduce natural gas prices in 2023 from 2022, when end-of-March storage inventories were 1.4 Tcf, 17% below the previous five-year (2017–2021) average.
