Henry Hub prices hit record low in February

U.S. benchmark Henry Hub daily natural gas price averaged $1.50 per million British thermal units (MMBtu) on Feb. 20, the lowest price in inflation-adjusted dollars since at least 1997, the U.S. Energy Information Administration (EIA) reports.

EIA, citing data from Refinitiv Eikon, said high natural gas production, low natural gas consumption, and higher natural gas inventories than the previous five-year (2018–22) average contributed to prices declining for much of 2023 and the first two months of 2024.

U.S. dry natural gas production generally rose throughout 2023, averaging a record high of 105.7 billion cubic feet per day (Bcf/d) in December 2023, according to data from S&P Global Commodity Insights. Natural gas consumption in the U.S. residential and commercial sectors so far this winter heating season (November 1, 2023–March 31, 2024) averaged about 5% (2.0 Bcf/d) lower than the five-year (2019–23) average, at 35.8 Bcf/d.

Because of high production and relatively low consumption, less natural gas has been withdrawn from storage this winter. For the week ending Feb. 16, U.S. working natural gas inventories averaged 12% above the year-ago average and nearly 22% above the five-year (2019–23) average, according to the EIA’s Weekly Natural Gas Storage Report. Relatively high storage levels indicate an oversupplied market and contribute to lower natural gas prices.