The Henry Hub daily natural gas spot price fell to record lows in February.

On February 20, 2024, the U.S. benchmark Henry Hub daily natural gas price averaged $1.50 per million British thermal units (MMBtu), the lowest price in inflation-adjusted dollars since at least 1997, according to Refinitiv Eikon data. High natural gas production, low natural gas demand, and bigger natural gas stockpiles than the previous five-year average (2018-22) all contributed to price declines during 2023 and the first two months of 2024.

According to S&P Global Commodity Insights, dry natural gas output in the United States increased steadily throughout 2023, reaching a new high of 105.7 billion cubic feet per day (Bcf/d) in December. Following a brief drop in production in mid-January due to winter storm Heather, output has remained relatively high since January 26, averaging more over 104.1 Bcf/d. So far this winter heating season (November 1, 2023-March 31, 2024), natural gas consumption in the United States' residential and commercial sectors has averaged around 5% (2.0 Bcf/d) less than the five-year (2019-23) average of 35.8 Bcf/d.

Because of strong output and low use, less natural gas has been extracted from storage this winter. According to our Weekly Natural Gas Storage Report, operating natural gas stocks in the United States were 12% higher than the previous year and approximately 22% more than the five-year (2019-23) average for the week ending February 16. Relatively high storage levels imply an oversupplied market, which helps to cut natural gas prices.

Since February 7, the Henry Hub daily natural gas price has been less than $2.00/MMBtu, hitting its lowest point on February 20; six of the record-low daily prices when adjusted for inflation occurred this month. The Henry Hub price has not been this low since 2020, when it averaged $2.05/MMBtu for the year. The COVID-19 pandemic's economic repercussions, particularly reduced natural gas use, and the mild 2019-20 winter, which resulted in comparatively substantial natural gas storage inventories, largely contributed to 2020's low pricing.