Henry Hub gas prices averaged $6.45 per MMBtu in 2022 rising from $3.89 in 2021, driven by increased demand from Europe and the gradual re-opening of China. Prices have since fallen 62% to average $2.46 in 2023. The global LNG sugar rush resulted in LNG prices to rise to over $32 per MMBtu in 2022 and have remained over $15 per MMBTU in 2023. Exhibit 1 shows average natural gas and LNG prices. While the LNG sugar rush may have not entirely subsided, the landscape for U.S. natural gas prices does seem bleak through 2023. ADI sees four key factors behind this including continued U.S. natural gas production growth, domestic demand stagnation, slowing LNG exports growth, and pipeline takeaway and storage capacity constraints.
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