Rising domestic and international demand for natural gas as winter weather settles in, combined with continued light production levels, are expected to send U.S. natural gas prices soaring next year, according to multiple forecasts issued in recent days.

gas prices

In its latest Short-Term Energy Outlook (STEO) published October 6, the U.S. Energy Information Agency said it expects monthly average spot prices will remain higher than $3.00/MMBtu throughout 2021, averaging $3.13 for the year, up from a forecasted average of $2.07 for 2020.

Although U.S. natural gas storage inventories are expected to exceed 4.0 Tcf by the end of October, setting a new record, the surplus is expected to be short-lived as low crude prices keep associated gas output from oil-directed rigs at levels lower than...