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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 prices will remain high through the rest of 2004 (Short-Term Energy Outlook, July 2004). Wellhead prices are expected to average $5.85 per MMBtu from July through December, while composite spot prices will likely stay well above $6.00. Spot prices at the Henry Hub averaged $6.34 per MMBtu in May and $6.27 in June, as strong demand for natural gas coupled with high petroleum prices has led to higher gas prices despite nearly normal storage inventory levels. Storage stocks at the end of June, based on monthly data, were almost 3 percent higher than the 5-year average and 14 percent higher than last year at the same time. Overall in 2004, spot prices at the Henry Hub likely will average about $6.12 per MMBtu, which is 9 percent higher than the 2003 average. In 2005, prices are expected to decrease only slightly as production gains are expected to be relatively low.

 

Natural gas production is expected to increase by only about 0.5 percent in 2004 and 2005. Despite increases in new natural gas well completions, which are estimated at close to 20,000 in 2003 and will likely grow to more than 23,000 wells per year through 2005, production growth will be modest because of apparently high decline rates from existing wells. Natural gas demand is expected to increase by about 1.1 percent in 2004, owing to increasing economic growth, the continuing rise in electricity demand, and below-average hydroelectric power levels in the Pacific Northwest. Demand growth in 2005 is expected to be limited by the prevailing relatively high natural gas end-use prices.

 

 

Short-Term Natural Gas Market Outlook, July 2004 

 

History

Projections

 

Apr-04

May-04

Jun-04

Jul-04

Aug-04

Sep-04

PRICES ($/MMBtu)

 

 

 

 

 

 

  Average Wellhead Price

5.06

5.50

5.64

5.71

5.76

5.81

  Residential Price

9.88

10.76

11.87

12.47

12.80

12.54

  Electric Utilities Price

5.69

6.19

6.13

6.22

6.27

6.35

 

 

 

 

 

 

 

SUPPLY (Trillion Cubic Feet)

 

 

 

 

 

 

  Total Dry Gas Production

1.568

1.617

1.562

1.617

1.620

1.572

  Net Imports

0.269

0.269

0.258

0.269

0.270

0.262

    Imports

0.329

0.328

0.315

0.327

0.331

0.323

    Exports

0.060

0.059

0.057

0.058

0.061

0.061

  Suppl. Gaseous Fuels

0.004

0.005

0.005

0.006

0.006

0.005

  Total New Supply

1.841

1.891

1.825

1.892

1.896

1.839

 

 

 

 

 

 

 

  Working Gas in Storage

 

 

 

 

 

 

    Opening

1.028

1.227

1.607

2.006

2.315

2.610

    Closing

1.227

1.607

2.006

2.315

2.610

2.950

  Net Storage Withdrawal

-0.199

-0.380

-0.399

-0.309

-0.295

-0.340

 

 

 

 

 

 

 

  Total Supply

1.642

1.511

1.426

1.583

1.601

1.499

 

 

 

 

 

 

 

  Balancing Item

0.118

0.072

0.030

0.012

-0.012

-0.091

 

 

 

 

 

 

 

  Total Primary Supply

1.760

1.583

1.455

1.595

1.589

1.408

 

 

 

 

 

 

 

DEMAND (Trillion Cubic Feet)

 

 

 

 

 

 

  Lease & Plant Fuel

0.092

0.095

0.093

0.097

0.097

0.094

  Pipeline Use

0.050

0.046

0.044

0.049

0.048

0.042

  Delivered to Consumers

1.618

1.442

1.318

1.449

1.445

1.272

    Residential

0.400

0.236

0.155

0.126

0.117

0.130

    Commercial

0.241

0.177

0.141

0.134

0.132

0.135

    Industrial

0.603

0.564

0.521

0.550

0.556

0.534

    Electric Power

0.374

0.465

0.502

0.639

0.640

0.472

  Total Demand

1.760

1.583

1.455

1.595

1.589

1.408

 

Source:  Energy Information Administration, Short-Term Energy Outlook, July 2004.

 

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