Increased domestic industrial energy use, coupled with strong and ongoing demand for U.S. exports, could more than offset a gradual rise in production and drive natural gas prices this year well above the level at which they finished a pandemic-plagued 2020, analysts and industry insiders say.

Henry Hub Jan 6

Analysts at Raymond James and Associates Inc. estimated gas futures could reach $4.00/MMBtu by the end of 2021. While residential demand held up last year amid the elevated work-from-home levels imposed in response to virus outbreaks, commercial and industrial demand declined during the initial depths of the pandemic last year. The Raymond James team expects energy use from those sectors to mount as vaccines get widely distributed, the pandemic fades and economic activity picks up.

At the...