In 2024, the U.S. benchmark Henry Hub natural gas spot price averaged $2.21 per million British thermal units (MMBtu), marking the lowest annual average ever recorded, adjusted for inflation. This represents a 16% drop from 2023 and a dramatic 68% decline from 2022, the largest two-year fall in history.
Throughout the year, monthly prices ranged from $3.25/MMBtu in January to a record low of $1.51/MMBtu in March, showing a smaller price variation compared to previous years. The monthly price fluctuations in 2024 were within a $1.74/MMBtu range, significantly narrower than the $2.32/MMBtu range seen over the past five years.
In addition to the low annual average, 2024 saw several daily and monthly price records. On an inflation-adjusted basis, February, March, April, and August all had the lowest monthly prices ever recorded. The year also experienced the four lowest daily prices in natural gas history.
The drop in prices was mainly due to robust U.S. natural gas supply and limited growth in demand. The biggest price spike of the year occurred in January, when the Henry Hub spot price hit $13.49/MMBtu due to a cold snap that increased demand for heating. However, this was short-lived, and prices quickly dropped back down.
By February and March, strong natural gas production and moderate weather helped stabilize prices. Full storage also contributed to the price decrease. At the end of the 2023–24 winter heating season, natural gas inventories were at 2,306 billion cubic feet (Bcf), 25% higher than the previous year and 39% above the five-year average.
Throughout the second and third quarters of 2024, spot prices remained low. Prices typically drop in April and May as residential and commercial demand for heating falls. U.S. natural gas exports remained flat, and there was little growth in liquefied natural gas (LNG) capacity, further limiting demand.
Despite low prices, summer consumption in the electric power sector to meet air-conditioning needs caused less-than-average injections, gradually reducing the storage surplus. However, the U.S. entered the winter of 2024–25 with the highest gas storage levels since 2016.
By December, Henry Hub prices began to rise, driven by colder temperatures and higher demand for space heating. The U.S. Energy Information Administration (EIA) will provide further details on expected residential energy consumption and prices for the 2024–25 winter heating season in its Winter Fuels Outlook.
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