U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Short-Term Energy Outlook
Henry Hub spot prices rose in June and averaged $2.59 per million British thermal units (MMBtu) for the month, the highest monthly average since September 2015. The increase in prices comes as production has declined and as demand for natural gas to fuel electricity generation has increased. April 2016 marketed natural gas production was 78.8 billion cubic feet per day (Bcf/d), a 0.3 Bcf/d decline from its level in March 2016 and in April 2015, according to the most recent Natural Gas Monthly. Recent preliminary data from PointLogic indicate production may have declined further since then. EIA projects increases in the natural gas price will continue through 2016, and will contribute to a reversal in production declines in the second half of the year.
Natural Gas Consumption
EIA's forecast of U.S. total natural gas consumption averages 76.5 Bcf/d in 2016 and 77.7 Bcf/d in 2017, compared with 75.3 Bcf/d in 2015. In 2016, increases in total natural gas consumption are mainly attributed to increases in electric power sector use. Forecast electric power sector use of natural gas increases by 4.9% in 2016, then declines by 1.4% in 2017, as rising natural gas prices contribute to increasing coal use for electricity generation. Forecast industrial sector consumption of natural gas increases by 2.7% in 2016 and by 1.5% in 2017, as new fertilizer and chemical projects come online.
Natural Gas Production and Trade
EIA's estimated natural gas production in June averaged 79.1 Bcf/d, which is down almost 1.0 Bcf/d from the record-high daily average production in February 2016. EIA expects production to rise through 2016 and 2017 in response to forecast price increases and increases in liquefied natural gas (LNG) exports. Overall, EIA expects natural gas production to rise by 1.0% in 2016 and by 2.4% in 2017.
Natural gas pipeline exports to Mexico have risen this year, and EIA expects that growth to continue because of growing demand from Mexico's electric power sector and because of flat natural gas production in Mexico. Gross pipeline exports are expected to increase by 0.7 Bcf/d in 2016 before falling by 0.2 Bcf/d in 2017 to an average of 5.3 Bcf/d.
EIA projects LNG gross exports will rise 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 2016. EIA projects gross LNG exports will average 1.3 Bcf/d in 2017, as Sabine Pass ramps up capacity.
With expected growth in gross exports, net imports of natural gas decline from 2.6 Bcf/d in 2015 to 0.2 Bcf/d in 2017, and the United States is expected to become a net exporter of natural gas during the second half of 2017.
Natural Gas Inventories
Natural gas inventories in March ended at 2,494 Bcf, the highest end-of-withdrawal-season level on record. During May and June, injections have been somewhat lower than the previous five-year (2011-15) average. As of July 1, natural gas inventories were at 3,179 Bcf. Even with lower-than-average storage injections, EIA forecasts natural gas inventories to be 4,022 Bcf at the end of October 2016, which would be the highest level on record for that time of year.
Natural Gas Prices
The Henry Hub natural gas spot price averaged $2.59/MMBtu in June, up 67 cents/MMBtu from the average price in May. EIA expects natural gas prices to gradually rise throughout the forecast period but remain lower than they were last summer. Forecast Henry Hub natural gas prices average $2.36/MMBtu in 2016 and $2.95/MMBtu in 2017.
Natural gas futures contracts for October 2016 delivery that were traded during the five-day period ending July 7 averaged $2.88/MMBtu. Current options and futures prices imply that market participants place the lower and upper bounds for the 95% confidence interval for October 2016 contracts at $2.00/MMBtu and $4.14/MMBtu, respectively. In early July 2015, the natural gas futures contract for October 2015 delivery averaged $2.85/MMBtu, and the corresponding lower and upper limits of the 95% confidence interval were $1.92/MMBtu and $4.24/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||2.43||3.04|
|Supply||(billion cubic feet per day)|
|Dry Gas Production||70.49||74.06||74.52||76.28|
|Consumption||(billion cubic feet per day)|
|Electric Power Sector||22.32||26.50||27.80||27.41|
|Primary Assumptions||(percent change from previous year)|
|Heating Degree Days||1.9||-10.2||-2.6||4.0|
|Cooling Degree Days||-0.7||14.7||-2.3||-3.1|
|Natural-gas-weighted Industrial Production||-0.8||1.3||1.4||2.9|
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|