SEATTLE (Oil Monster): Bank of America has lowered its full-year forecast for Henry Hub natural gas prices by about $0.2 per MMBtu to $3.4/MMBtu, citing extended mild weather conditions from winter into April that have pressured demand and boosted inventories.
The warmer-than-expected season helped replenish gas storage, with end-of-summer inventories projected to reach 3.83 trillion cubic feet—above the five-year average. Despite the downgrade, the bank noted the outlook still exceeds the current forward curve due to underlying supply tightness.
In the western U.S., reduced snowpack and low reservoir levels are expected to curb hydropower generation, increasing reliance on gas-fired electricity. Regions such as Southern California may see stronger demand, particularly as LNG projects like Costa Azul ramp up and competition for Canadian gas intensifies.
Meanwhile, the East and Midwest face rising power demand, driven in part by energy-intensive data centers. Markets such as PJM and MISO could see higher power prices, while storage deficits may prove difficult to refill.
Constraints in the Permian Basin continue to pressure prices, with pipeline limitations expected to ease only by late 2026 or 2027.
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