Increasing capacity for gas-fired electric generation, growing domestic consumption and new export capabilities will all contribute to increasing Henry Hub spot prices this year, though the expected average — $3.43/MMBtu — may not be as high as previously forecast, according to the Energy Information Administration (EIA).

Forecasts in EIA’s latest Short-Term Energy Outlook (STEO) for Henry Hub spot price averages in 2017 and 2018 ($3.70/MMBtu) were down compared with those in the previous STEO, which predicted $3.55/MMBtu this year and $3.73/MMBtu next year.

It was the first downturn in EIA’s price forecasts in some time. January’s prognostication for 2017 was up significantly from the December STEO, in which EIA said it expected Henry Hub natural gas spot prices to average $3.27/MMBtu this year. EIA’s 2017 natural gas price forecast stood at $2.87/MMBtu in September. In 2016, Henry Hub spot prices averaged $2.51/MMBtu.

The front-month natural gas contract for delivery at Henry Hub decreased by 14 cents/MMBtu from Jan. 3, settling at $3.19/MMBtu on Feb. 2, EIA said. NYMEX contract values for April 2017 delivery traded during the five-day period ending Feb. 2 suggest a price range from $2.42/MMBtu to $4.38/MMBtu encompasses the market expectation of Henry Hub natural gas prices in April 2017 at the 95% confidence level, EIA said.

“In January, average Henry Hub natural gas spot prices fell by 29 cents per MMBtu from December levels to $3.30/MMBtu,” the agency said. “Mild January temperatures, which were the warmest since 2006, contributed to lower prices.”

Thanks in part to higher prices, dry natural gas production is expected to average 73.7 Bcf/d in 2017, a 1.3 Bcf/d increase from the 2016 level, which was down for the first time since 2005. Natural gas production in 2018 is expected to increase by an average of 4.1 Bcf/d from the 2017 level, EIA said.

“A tightening market and higher natural gas prices have contributed to greater interest by producers in increasing natural gas production,” EIA said.