Natural gas prices are expected to rise over the next two years, as colder winter weather drives up demand for natural gas and average withdrawals from storage are the highest they have been in years, according to the U.S. Department of Energy.
The Henry Hub natural gas spot price averaged $2.51 per million British thermal unites in 2016, and analysts expect it to rise over the next two years, to an average $3.55 in 2017 and $3.73 in 2018.
The hot summer of 2016 set the rise in natural gas prices in motion, as demand for natural gas decreased inventory in storage. Then, colder weather this winter spiked demand for natural gas, along with an increase in natural-gas fired power plants.
For the past three weeks, net withdrawals of natural gas from storage have been more than 200 billion cubic feet, more than the five-year average of net withdrawal at 170 billion cubic feet. The amount of natural gas being taken out of storage is higher than average in most regions around the country, except on the West Coast.