EIA Outlook: More Of The Same

By Mike Brezonick06 August 2019

The latest Short-Term Energy Outlook published by the U.S. Energy Information Administration can probably be summed up in just a few words when it comes to the forecast for natural gas: more of the same.

Looking at gas prices, the Henry Hub natural gas spot price averaged $2.37/ MMBtu in July, down 3 cents/MMBtu from June. However, by the end of the month, spot prices had fallen below $2.30/MMBtu.

Based on this price movement and EIA’s forecast of continued strong growth in natural gas production, EIA lowered its Henry Hub spot price forecast for the second half of 2019 to an average of $2.36/MMBtu.

EIA said it expects natural gas prices in 2020 will increase to an average of $2.75/MMBtu. EIA’s natural gas production models indicate that rising prices are required in the coming quarters to bring supply into balance with rising domestic and export demand in 2020.

EIA forecasts that U.S. dry natural gas production will average 91 Bcf/d in 2019, up 7.6 Bcf/d from 2018. EIA expects monthly average natural gas production to grow in late 2019 and then decline slightly during the first quarter of 2020 as the lagged effect of low prices in the second half of 2019 reduces natural gas-directed drilling. However, EIA forecasts that growth will resume in the second quarter of 2020, and natural gas production in 2020 will average 92.5 Bcf/d.

EIA estimates that natural gas inventories ended July at 2.7 Tcf, 13% higher than levels from a year earlier and 4% lower than the five-year (2014–18) average. EIA forecasts that natural gas storage injections during the 2019 April-through-October injection season will outpace the previous five-year average and that inventories will rise to more than 3.7 Tcf at the end of October, which would be 16% higher than October 2018 levels and slightly above to the five-year average.

MAGAZINE
NEWSLETTER
Delivered directly to your inbox, CompressorTech² News features the pick of the breaking news stories, product launches, show reports and more from KHL's world-class editorial team.
Latest News
New lubricant additive from Cortec
Designed for gearboxes, turbines and other lubricant systems at risk of corrosion from trapped water
Sulzer marks opening of new laser metal deposition facility
Process designed for rotor, shaft repairs
Reese new CEO of GE Digital
Replaces Patrick Byrne, who moves to onshore wind business