Henry Hub Price

Summary

The Henry Hub price averaged US$2.67 per million British thermal units (MMBtu) in 2023, a decrease of 59% from 2022. In the base-case, the Henry Hub price is forecast to dip to US$2.60/MMBtu in 2024, increase to US$2.90/MMBtu in 2025, and reach US$3.91/MMBtu by 2033. Based on the low- and high-price cases, prices are projected to range from US$1.76/MMBtu to US$8.67/MMBtu by 2033.

In 2023

U.S. production: According to the U.S. Energy Information Administration, dry natural gas production (which is similar to the AER's definition of marketable gas) reached an estimated 2.92 billion cubic metres per day (m³/d) (103.8 billion cubic feet per day [Bcf/d]) in 2023, a 4% increase from 2022. Production increased reflecting higher well productivity despite fewer active rigs.

U.S. demand and exports: In 2023, natural gas consumption in the U.S. increased to 89.1 Bcf/d from 88.5 Bcf/d in 2022. The U.S. increased its exports of natural gas in 2023. U.S. liquified natural gas (LNG) exports jumped by 12% in 2023 as production ramped up at recently built LNG plants. Similarly, U.S. natural gas exports to Canada and Mexico via pipeline increased by 8% to 9.0 Bcf/d in 2023.

Forecast for 2024 to 2033

U.S. production and demand: The Henry Hub price is anticipated to decrease slightly in 2024 amid mild winter weather and ample supply combined with modest demand growth from residential use and power generation. U.S. demand growth is expected to accelerate in 2025; however, solid production growth will limit price gains. Natural gas demand is expected to continue to grow in 2026. Gas production associated with oil wells will increase as oil production is expected to increase due to higher forecast oil prices. From 2027 and onwards, natural gas prices are forecast to increase due to growth in power generation, petrochemical plant demand, and hydrogen plant demand.

U.S. exports and imports: Natural gas exports from the U.S. are anticipated to rise over the forecast period. U.S. LNG capacity is expected to expand in 2024 and 2025. The U.S. review of new LNG permits is not expected to have an immediate effect on LNG projects already under construction over this time; however, projects planned for after 2026 may be at risk of being delayed or cancelled. Due to this uncertainty, these projects are not explicitly included in the Henry Hub price forecast. Natural gas pipeline imports from Canada are expected to revert to the decreasing trend that began in 2008 as U.S. domestic natural gas production rises.

Low- and High-Price Cases

The low- and high-price cases capture near- and long-term volatility of the Henry Hub price and are estimated using a 90% confidence interval. The following scenarios were captured in the price cases:

Low-price case:

• North American demand is less than expected due to an economic slowdown.
• U.S. natural gas production grows faster than expected.
• More associated gas is produced as significantly more oil wells are drilled than expected in the near term.
• LNG capacity grows slower than expected.

High-price case:

• North American demand rises more than expected due to stronger economic growth.
• U.S. natural gas production grows slower than expected.
• Less associated gas is produced as significantly fewer oil wells are drilled than expected in the near term.
• Switching from coal to natural gas for power generation and industrial electrification accelerates in the U.S.

Learn More

• Methodology
• Data [XLSX]