U.S. Natural Gas Prices Seen Flirting with $3 in February on LNG Strength, Storage Drawdown

Average natural gas spot prices at Henry Hub are expected to rise to $2.98/MMBtu this month, a 27-cent increase over January prices and sharply higher than the $2.59 December average, the U.S. Energy Information Administration (EIA) said Tuesday.

The forecast would mean a corresponding increase in Mexico natural gas prices, which are closely correlated to U.S. benchmarks because of Mexico’s growing reliance on gas imports via pipeline from its neighbor to the north.

Mexico natural gas prices hit a 22-month high in December, averaging $3.64, according to the latest IPGN monthly natural gas price index published by the Comisión Reguladora de Energía (CRE).

In the February edition of its Short-Term Energy Outlook (STEO), EIA attributed the higher projected Henry Hub prices...