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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:

EIA projects that natural gas wellhead prices will continue to range between $2.80 and $2.90 per MMBtu for the rest of the summer (Short-Term Energy Outlook, July 2002). Prices have generally stayed over $2.85 per MMBtu since mid-March despite unusually high storage levels and the lack of underlying demand strength. However, if relatively cool weather prevails in the third quarter and high storage levels persist, sharply lower prices would be expected later in the summer. Overall in 2002, wellhead prices are expected to average about $2.82 per MMBtu compared with $4.00 in 2001. Prices during the upcoming winter, assuming normal weather, are expected to average close to $3.30 per MMBtu, which is almost $1.00 higher than last winterís price but only about 10-15 percent higher than current prices.

 

Domestic dry natural gas production is projected to fall by about 2.3 percent in 2002 compared with the 2001 growth rate of 2.4 percent. Lower natural gas prices have reduced production and resource development incentives from their highs of last summer. Still, current supplies, including natural gas in storage, appear to be at very comfortable levels. Estimated working gas stocks at the end of June were 2,284 Bcf, which is 19 percent above the 5-year average and 400 Bcf higher than a year ago. Furthermore, gas-directed drilling, while down sharply from summer 2001 levels, is still quite strong by a longer historical perspective. The gas rig count as of July 3 was 716, up 21 percent from the recent low of 591 for the week ending April 5, 2002.

 

Natural gas demand this summer is projected to be 3.6 percent higher than last summerís level, mainly because of the fall in natural gas prices since a year ago and the slowly reviving economy. Natural gas demand for the entire year 2002 is projected to increase by 1.7 percent over 2001 levels, a downward revision of projected demand in the June Outlook. The revision is due to unexpectedly low demand figures for February now being included in the 2002 totals and to the fact that assumptions about GDP growth for this year have been revised downward. Growth is for the most part limited to the industrial sector. In 2003, natural gas demand growth is expected to increase by 3.5 percent, boosted by expected higher heating-related demand and an accelerating economy. In 2003, natural gas demand growth is expected across all sectors.


 

Short-Term Natural Gas Market Outlook, July 2002 

 

History

Projections

 

Apr-02

Ma†††††††††† May-02

Jun-02

Jul-02

Aug-02

Sep-02

PRICES ($/MMBtu)

 

 

 

 

 

 

Average Wellhead Price

2.94

2.93

2.87

2.83

2.86

2.84

Residential Price

7.13

7.89

8.81

9.23

9.43

9.11

Electric Utilities Price

3.43

3.41

3.31

3.24

3.26

3.26

 

 

 

 

 

 

 

SUPPLY (Trillion Cubic Feet)

 

 

 

 

 

 

Total Dry Gas Prod

1.561

1.590

1.553

1.598

1.594

1.543

Net Imports

0.282

0.285

0.276

0.290

0.290

0.272

††† Imports

0.325

0.329

0.320

0.335

0.336

0.317

††† Exports

0.044

0.044

0.044

0.045

0.046

0.045

Suppl. Gaseous Fuels

0.005

0.005

0.004

0.005

0.005

0.005

Total New Supply

1.849

1.880

1.834

1.893

1.889

1.821

 

 

 

 

 

 

 

Working Gas in Storage

 

 

 

 

 

 

††† Opening

1.518

1.628

1.928

2.284

2.555

2.808

††† Closing

1.628

1.928

2.284

2.555

2.808

3.077

Net Storage Withdrawal

-0.110

-0.300

-0.356

-0.271

-0.254

-0.269

 

 

 

 

 

 

 

Total Supply

1.739

1.580

1.478

1.622

1.635

1.552

 

 

 

 

 

 

 

Balancing Item

0.059

-0.004

0.014

-0.065

-0.063

-0.094

 

 

 

 

 

 

 

Total Primary Supply

1.798

1.576

1.491

1.557

1.572

1.458

 

 

 

 

 

 

 

DEMAND (Trillion Cubic Feet)

 

 

 

 

 

 

Lease & Plant Fuel

0.098

0.100

0.097

0.099

0.099

0.096

Pipeline Use

0.050

0.042

0.038

0.042

0.041

0.038

Delivered to Consumers

1.650

1.434

1.356

1.416

1.432

1.324

††† Residential

0.426

0.248

0.162

0.131

0.121

0.136

††† Commercial

0.272

0.198

0.164

0.160

0.158

0.160

††† Industrial

0.753

0.747

0.748

0.772

0.798

0.771

††† Elec Utility

0.199

0.241

0.281

0.353

0.354

0.256

Total Demand

1.798

1.576

1.491

1.557

1.572

1.458

 

Source:Energy Information Administration, Short-Term Energy Outlook, July 2002.

File last modified: 07/11/2002

 

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