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 late spring, averaging $4.89 per MMBtu in March, $4.92 in April, and $4.84 in May (Short-Term Energy Outlook, March 2004). Spot prices averaged $5.90 per MMBtu in January but fell to $4.80 in February as temperatures moderated and heating demand lessened. Still, underground storage facilities reported above-average withdrawals for February, leaving storage inventories at the beginning of March about 11 percent lower than the 5-year average. However, as of March 5, working gas levels were about 55 percent higher than year-earlier levels. Overall in 2004, spot prices are expected to average $5.04 per MMBtu, declining almost 6 percent from levels in 2003, while wellhead prices will average about $4.90. In 2005, natural gas spot prices are again likely 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. Natural gas production is estimated to have increased by 2.2 percent in 2003. Production is expected to continue to expand 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 increase by about 2.6 percent in 2004, owing to expected growth in the economy, along with somewhat lower projected annual average prices. In 2005, demand is also expected to increase as the economy continues to expand, although the growth rate slows to 0.4 percent because of expected reductions in weather-related demand in the first quarter of 2005 relative to the first quarter of 2004.
Source: Energy Information Administration, Short-Term
Energy Outlook, March 2004. Need Help? |
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Energy Information Administration, EI 30 |
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