American liquefied natural gas (LNG) prices are expected to tumble by almost a third this year, as milder winter weather is leading to a glut.
LNG prices are dropping as supply growth has outpaced demand growth in recent months, according to the U.S. Energy Information Administration (EIA), in its Short Term Energy Outlook (STEO), on Feb. 7.Domestic production of natural gas is expected to rise to a new high in 2023, while demand has tumbled due to warmer-than-expected weather, EIA researchers said.
The EIA estimates that Henry Hub natural gas spot prices will average $3.40 per million metric British thermal units per day (MMBtu) for 2023 and $4.04 MMBtu for 2024, down from January’s estimates of $4.90 MMBtu in 2023 and $4.80 MMBtu in 2024.The Henry Hub annual natural gas spot price was at $6.42 per MMBtu in 2022.
