With stockpiles higher than previously expected as winter temperatures have thus far deviated to the warmer side of normal, the U.S. Energy Information Administration (EIA) is slashing its forecast for average January natural gas spot prices to $3.10/MMBtu, down from $3.42 predicted a month ago.

natural gas price forecast dec 8

The updated forecast for benchmark Henry Hub, published Tuesday in the December edition of the agency’s Short-Term Energy Outlook, follows a stretch of milder weather that saw November spot prices at the benchmark average $2.61, up slightly from the October average of $2.39.

“Price increases last month were moderated by significantly warmer-than-normal temperatures, which reduced residential space heating demand for natural gas despite many remaining at home in response to the...