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Natural Gas Summary from the Short-Term Energy Outlook
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Natural Gas Summary from the Short-Term Energy Outlook

   

Natural Gas Summary from the Short-Term Energy Outlook:

 

The Energy Information Administration (EIA) projects that natural gas wellhead prices will average $4.41 per MMBtu in December 2003, although spot prices are expected to average $5.38 (Short-Term Energy Outlook, December 2003). The average wellhead price is expected to increase moderately to $4.56 during the first three months of 2004.  Natural gas prices were lower in November than previously expected but forward price expectations remain sensitive to weather conditions.  Prices increased rapidly in futures trading in early December as some cold weather moved into the Eastern United States and reported withdrawals from gas storage were slightly larger than expected.  Spot prices above $5 per MMBtu remain likely over the next few months if normal (or colder) weather prevails, especially with oil prices remaining at relatively high levels.  Natural gas storage levels are still above average and hold the potential to push prices back down if warm temperatures and weak heating demand materialize later in the winter, just as upward spikes remain a strong possibility if the weather turns cold.

 

Natural gas demand is expected to show a decline of 2.3 percent in 2003 largely owing to high prices discouraging demand in the industrial and electric power sectors.  However, expected growth in the economy, along with somewhat lower projected annual average prices, are expected to increase demand by nearly 1 percent in 2004.  Natural gas production is expected to increase by about 2.4 percent this year, but to fall back somewhat in 2004 as drilling intensity declines.  In 2004, the projected supply gap between demand and production is offset by the expectation that storage injection requirements will be less than those of 2003, when stocks after the winter of 2002-2003 were at record lows.


 

Short-Term Natural Gas Market Outlook, December 2003 

 

History

Projections

 

Sep-03

Oct-03

Nov-03

Dec-03

Jan-04

Feb-04

PRICES ($/MMBtu)

 

 

 

 

 

 

  Average Wellhead Price

4.46

4.31

4.11

4.41

4.80

4.65

  Residential Price

12.02

9.86

9.11

8.69

8.84

9.07

  Electric Utilities Price

4.65

4.63

4.74

5.61

5.82

5.43

 

 

 

 

 

 

 

SUPPLY (Trillion Cubic Feet)

 

 

 

 

 

 

  Total Dry Gas Production

1.594

1.669

1.631

1.660

1.666

1.545

  Net Imports

0.289

0.294

0.307

0.336

0.317

0.286

    Imports

0.343

0.350

0.365

0.394

0.375

0.342

    Exports

0.055

0.056

0.057

0.058

0.057

0.056

  Suppl. Gaseous Fuels

0.006

0.006

0.007

0.007

0.008

0.006

  Total New Supply

1.889

1.969

1.945

2.003

1.991

1.837

 

 

 

 

 

 

 

  Working Gas in Storage

 

 

 

 

 

 

    Opening

2.444

2.868

3.155

3.081

2.569

1.825

    Closing

2.868

3.155

3.081

2.569

1.825

1.348

  Net Storage Withdrawal

-0.424

-0.287

0.074

0.512

0.744

0.477

 

 

 

 

 

 

 

  Total Supply

1.465

1.682

2.019

2.515

2.735

2.314

 

 

 

 

 

 

 

  Balancing Item

0.049

-0.103

-0.214

-0.253

-0.152

0.064

 

 

 

 

 

 

 

  Total Primary Supply

1.514

1.580

1.805

2.262

2.583

2.378

 

 

 

 

 

 

 

DEMAND (Trillion Cubic Feet)

 

 

 

 

 

 

  Lease & Plant Fuel

0.087

0.092

0.091

0.093

0.091

0.085

  Pipeline Use

0.043

0.047

0.055

0.071

0.080

0.072

  Delivered to Consumers

1.383

1.441

1.659

2.098

2.411

2.222

    Residential

0.132

0.230

0.422

0.716

0.929

0.818

    Commercial

0.129

0.180

0.268

0.402

0.490

0.457

    Industrial

0.558

0.600

0.604

0.623

0.645

0.628

    Electric Power

0.564

0.431

0.364

0.357

0.347

0.319

  Total Demand

1.514

1.580

1.805

2.262

2.583

2.378

 

Source:  Energy Information Administration, Short-Term Energy Outlook, December 2003.

 

 

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