Natural Gas Summary from the Short-Term
Energy Outlook |
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Natural Gas Summary from
the Short-Term Energy Outlook: EIA projects that natural gas wellhead prices will remain relatively high through the rest of the winter and the first part of spring, with prices averaging $5.19 per MMBtu through March and $4.58 in April (Short-Term Energy Outlook, February 2004). Wellhead prices for the current heating season (November 2003 through March 2004) are expected to average $4.99 per MMBtu, or about 7 percent higher than last winter's level. Spot prices at the Henry Hub averaged $5.90 per MMBtu in January as cold temperatures (6 percent colder than normal nationally and 19 percent colder than normal in the Northeast) kept natural gas prices and heating demand high. Despite the severe weather, natural gas storage stocks were 3 percent above average as of January 30 and spot prices in early February have moved down somewhat. Overall in 2004, spot prices are expected to average about $4.90 per MMBtu and wellhead prices are expected to average $4.63 per MMBtu, declining moderately from the 2003 levels. In 2005, natural gas spot prices are projected to average about $5.00 per MMBtu, under the assumption that domestic and imported supply can continue to grow by about 1 percent per year. Early estimates indicate that natural gas production increased by about 2.1 percent in 2003. Natural gas production is expected to continue to expand modestly through 2005, as natural gas well completions, which totaled an estimated 20,000 in 2003, continue to grow to between 21,000 and 22,000 wells per year over the next 2 years. Natural gas demand is expected to have declined by 3.7 percent in 2003 largely because high prices discouraged demand in the industrial and electric power. However, expected growth in the economy, along with somewhat lower projected annual average prices, are expected to increase demand by about 2.2 percent in 2004. Demand in 2005 is expected to increase by 1.1 percent as the economy continues to expand and prices ease slightly.
Source: Energy Information Administration, Short-Term
Energy Outlook, February 2004. Need Help? |
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