Increased domestic and international demand for natural gas as winter weather settles in, combined with continued light production levels, will drive Henry Hub spot prices to a monthly average of $3.38/MMBtu in January, the Energy Information Administration (EIA) said Tuesday.

In the latest Short-Term Energy Outlook (STEO), the 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.

Total U.S. working gas in storage ended September at more than 3.8 Tcf, 12% above the five-year average, EIA said. Inventories are expected to exceed 4.0 Tcf by the end of October, setting a record. However, researchers also said continued low crude prices would keep...