Commodities Buzz: US Annual Average Natural Gas Prices Double On Year In 2021

7 Jan 2022 , 05:25 PM

The wholesale spot price for natural gas at the Henry Hub in Louisiana (the US benchmark for natural gas prices) averaged $3.89 per million British thermal units (MMBtu) in 2021, almost doubling from the 2020 average, the US EIA noted in a latest update. US natural gas prices briefly spiked in February during a winter storm that strained natural gas and electricity markets in Texas and Oklahoma. Prices then increased through October as economic recovery contributed to overall growth in natural gas demand, which outpaced growth in natural gas supply. At the same time, inventories were low after the February winter storm. Henry Hub spot prices then declined in the final months of the year because winter weather was relatively mild. Daily natural gas spot and futures prices were volatile in 2021. Many factors contributed to price volatility, including weather-related consumption and production outages, high international natural gas prices that encouraged exports, key pipeline outages, the prices and availability of substitute fuels for power generation, summer storage injection needs, and the pace of growing natural gas production.

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