Extensive production declines and rising demand – both domestically and overseas — should fuel a surge in Henry Hub natural gas prices in 2021, according to Raymond James & Associates.

“The 2020 oil crash is still likely to drive a massive imbalance in U.S. gas supplies in 2021,” Raymond James analysts said in a report Monday. “U.S. gas prices will still average around $2 this year but exit 2021 around $4.”

Oil prices plummeted into negative territory earlier this year amid the economic malaise and demand destruction imposed by the coronavirus pandemic. Steep exploration and production (E&P) spending cuts followed and curbed associated gas supplies. Production levels are expected to remain low relative to pre-pandemic levels through 2021.

In total, the Raymond James...