U.S. households using natural gas to heat homes this winter are expected to spend less money than last winter, according to the U.S. Energy Information Administration.
The EIA, in their Winter Fuels Outlook that was issued in October, expects wholesale natural gas prices to be 14 percent lower this winter than the previous winter, primarily driven by higher U.S. natural gas production and fairly robust natural gas storage inventories. At the end of October, the EIA expected natural gas inventories to be approximately six percent more than the five-year average for the end of October.
The price of natural gas is impacted largely by the interplay between supply and demand. The current higher supply environment is helping to keep natural gas prices relatively low. The Henry Hub natural gas monthly spot price from March-September 2023 was in the low to mid-$2 range per MMbtu. Nymex futures pricing for the winter months (Nov.-March) indicates the market price ticking upwards into the mid to upper $3 range, which would still be lower than the market price last October of $5.66 per MMbtu.
There are several factors that impact natural gas prices, such as the weather. Warmer weather over the winter months tends to reduce demand for natural gas, which typically can result in lower natural gas market prices.
The EIA is forecasting the U.S. to average the same amount of heating degree days as last winter and slightly warmer than the average winter over the past decade.
