• Tony Zelinski

EIA-Short-Term Energy Outlook- Natural Gas

Natural gas

EIA estimates that the U.S. total working gas inventories were 3,616 billion cubic feet (Bcf) at the end of November. This level was about equal to the five-year (2014–18) average and 19% higher than a year ago. EIA expects storage withdrawals to total 1.9 trillion cubic feet (Tcf) from the end of October to the end of March, which is less than the five-year average winter withdrawal. A withdrawal of this amount would leave the end-of-March inventories at almost 1.9 Tcf, which would be 8% higher than the five-year (2015–19) average.

The U.S. benchmark Henry Hub natural gas spot price averaged $2.64 per million British thermal units (MMBtu) in November, up 31 cents/MMBtu from October. Prices increased as a result of November temperatures that were colder than the 10-year (2009–18) average.

EIA forecasts the Henry Hub spot price to average $2.45/MMBtu in 2020, down 14 cents/MMBtu from the 2019 average.

EIA forecasts that annual U.S. dry natural gas production will average 92.1 billion cubic feet per day (Bcf/d) in 2019, up 10% from 2018. Low prices in the third quarter of 2019 will reduce natural gas-directed drilling in the first half of 2020. EIA forecasts natural gas production in 2020 will average 95.1 Bcf/d.

EIA expects that natural gas production will grow much less in 2020 because of the lag between changes in price and changes in future drilling activity.

Recommended reading EIA