Mild winter weather and the global COVID-19 pandemic drove natural gas prices in 2020 to the lowest annual average prices in several decades, averaging $2.05 per MMBtu at the national benchmark Henry Hub in Louisiana, according to EIA data. Natural gas demand for heating was low due to the mild weather, and economic shutdowns triggered by the pandemic drove both demand and consumption even lower beginning in March. Prices continued to drop into the summer, reaching a decades-low Henry Hub monthly average price of $1.66 per MMBtu in June. Prices rebounded slightly during the remainder of the year, aided by an increase in LNG exports.
While prices remained low and natural gas use decreased among residential, commercial, and industrial users, natural gas consumption for power generation reached record highs, 2% higher than the 2019 average. Hot summer temperatures across much of the US and low prices drove the demand for natural gas power over coal.