EIA Lowers Gas Storage Forecast but Holds Steady on Price Outlook

The U.S. Energy Information Administration (EIA) has reduced its end-of-October natural gas storage forecast by more than 100 billion cubic feet (Bcf), reflecting a tightening supply outlook. Despite this reduction, the agency did not raise its Henry Hub price forecast, which remains relatively stable.

At a glance, the EIA expects the storage surplus to narrow to just 2% by the end of October. However, the Henry Hub benchmark is projected to average $3.16 in 2027, suggesting that the tighter storage situation is not expected to drive significant price increases.

One factor clouding the outlook is the El Niño weather pattern, which could dampen winter heating demand. This uncertainty may be contributing to the EIA's cautious stance on price forecasts despite the tighter storage projections.