U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Short-Term Energy and Summer Fuels Outlook
Working natural gas inventories in storage ended the winter withdrawal season at 2,478 billion cubic feet (Bcf), slightly above the previous record high for the end of March set in 2012. The winter heating season was characterized by warmer-than-normal temperatures, continued high production volumes, and low natural gas prices. Looking forward to the summer, EIA projects record-high levels of consumption of natural gas for power generation.
Natural Gas Consumption
EIA's forecast of U.S. total natural gas consumption averages 76.2 Bcf per day (Bcf/d) in 2016 and 77.6 Bcf/d in 2017, compared with 75.3 Bcf/d in 2015. In 2016, increases in the electric power sector primarily drive increases in total consumption. Forecast electric power sector use of natural gas increases by 3.9% in 2016, then declines by 1.3% in 2017, as natural gas prices rise. Forecast industrial sector consumption of natural gas increases by 2.7% in 2016 and by 2.2% in 2017, as new fertilizer and chemical projects come online.
Natural Gas Production and Trade
In January 2016, total marketed production of natural gas averaged 79.0 Bcf/d, an increase of nearly 1% from its December 2015 level. Production in Pennsylvania and West Virginia (two states with Marcellus production) increased substantially from December 2015 levels, offsetting production declines in other areas, particularly in Texas. EIA survey data have shown some production flattening on a national level, and EIA projects relatively low production growth through most of 2016, as low natural gas prices and declining rig activity begin to affect production. At the end of this year and into 2017, however, production growth is expected to rise in response to increases in price, industrial demand, and liquefied natural gas (LNG) exports.
EIA expects growth in U.S. natural gas production through 2017 to reduce demand for natural gas imports from Canada. EIA expects natural gas exports by pipeline to Mexico will increase because of growing demand from Mexico's electric power sector and flat natural gas production in Mexico. EIA projects LNG gross exports will increase to an average of 0.5 Bcf/d in 2016, with the startup of Cheniere's Sabine Pass LNG liquefaction plant in Louisiana, which sent out its first cargo in February. EIA projects gross LNG exports will average 1.3 Bcf/d in 2017, as Sabine Pass ramps up its capacity.
Natural Gas Inventories
End-of-March natural gas working inventories were 2,478 Bcf. The estimated end-of-March inventory level this year is the highest end-of-season level on record, slightly above the previous record, set in 2012. March 2016 was much warmer than normal, and the milder weather limited inventory withdrawals. Looking ahead to the start of next winter, EIA forecasts inventories to be 4,112 Bcf at the end of October 2016, which would be the highest level on record to begin the heating season.
Natural Gas Prices
The Henry Hub natural gas spot price averaged $1.73/MMBtu in March, a decline of 26 cents/MMBtu from the February price. Warmer-than-normal temperatures through most of the winter, record inventory levels, and production growth have contributed to sustained low natural gas prices. Monthly average Henry Hub spot prices are forecast to remain lower than $3.00/MMBtu through December 2016. Forecast Henry Hub natural gas prices average $2.18/MMBtu in 2016 and $3.02/MMBtu in 2017.
Natural gas futures contracts for July 2016 delivery that were traded during the five-day period ending April 7 averaged $2.16/MMBtu. Current options and futures prices imply that market participants place the lower and upper bounds for the 95% confidence interval for July 2016 contracts at $1.48/MMBtu and $3.14/MMBtu, respectively. In early April 2015, the natural gas futures contract for July 2015 delivery averaged $2.76/MMBtu, and the corresponding lower and upper limits of the 95% confidence interval were $1.90/MMBtu and $4.00/MMBtu.
|U.S. Natural Gas Summary|
|2014||2015||2016 projected||2017 projected|
|Prices||(dollars per thousand cubic feet)|
|Henry Hub Spot||4.52||2.71||2.25||3.11|
|Supply||(billion cubic feet per day)|
|Dry Gas Production||70.49||74.23||74.76||76.36|
|Consumption||(billion cubic feet per day)|
|Electric Power Sector||22.32||26.50||27.54||27.17|
|Primary Assumptions||(percent change from previous year)|
|Heating Degree Days||1.9||-10.2||-3.1||6.7|
|Cooling Degree Days||-0.7||14.6||-5.0||1.0|
|Natural-gas-weighted Industrial Production||0.9||1.2||0.7||3.3|
Interactive Data Viewers
|Table SF02. Average Summer Residential Electricity Usage|
|Table SF01. U.S. Motor Gasoline Summer Outlook|
|Table 1. U.S. Energy Markets Summary|
|Table 2. Energy Prices|
|Table 5a. U.S. Natural Gas Supply, Consumption, and Inventories|
|Table 5b. U.S. Regional Natural Gas Prices|
|Table 8. U.S. Renewable Energy Consumption|
|Table 9a. U.S. Macroeconomic Indicators and CO2 Emissions|
|Table 9b. U.S. Regional Macroeconomic Data|
|Table 9c. U.S. Regional Weather Data|
|Today In Energy||Daily|
|Natural Gas Weekly Update||Weekly|
|Peak Underground Working Storage Capacity||Annual|
|2016 Summer Fuels Outlook Slideshow||Apr-2016|
|2015-2016 Winter Fuels Outlook Slideshow||Oct-2015|
|2015 Summer Fuels Outlook Slideshow||Apr-2015|
|2014-2015 Winter Fuels Outlook Slideshow||Oct-2014|
|Weather Sensitivity in Natural Gas Markets||Oct-2014|
|2014 Outlook for Gulf of Mexico Hurricane-Related Production Outages||Jun-2014|
|2014 Summer Fuels Outlook Slideshow||Apr-2014|
|Energy-weighted industrial production indices||Mar-2014|
|Constraints in New England likely to affect regional energy prices this winter||Jan-2013|
|Change in STEO Regional and U.S. Degree Day Calculations||Sep-2012|
|2012 Outlook for Hurricane-Related Production Outages in the Gulf of Mexico||Jun-2012|
|Changes in Natural Gas Monthly Consumption Data Collection and the Short-Term Energy Outlook||Dec-2010|
|Trends in U.S. Residential Natural Gas Consumption||23-Jun-2010|
|Probabilities of Possible Future Prices||Apr-2010|
|Energy Price Volatility and Forecast Uncertainty||Oct-2009|
|The Implications of Lower Natural Gas Prices for Electric Generators in the Southeast||May-2009|