U.S. natural gas prices are expected to prove volatile through much of 2023, though the lofty $10 handle approached last summer appears far from reach, given ample supplies and the specter of a recession.

Such is the assessment of the Energy Information Administration (EIA) in a report released Thursday. In the supplement to its latest Short-Term Energy Outlook (STEO), EIA noted that New York Mercantile Exchange natural gas futures early in 2023 are in relatively weak territory, hovering around $2.500/MMBtu this month. That is less than half the level of late 2022 and a fraction of the highs reached last summer.

The culprits – mild winter weather in 2023 and near-record production – have resulted in robust levels of supplies in storage. This positioned the market to...