Natural Gas Summary from the Short-Term
Energy Outlook |
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Natural Gas Summary from
the Short-Term Energy Outlook: The Energy Information Administration (EIA) projects that natural gas prices will remain relatively high for the rest of 2004. Wellhead prices are expected to average $5.41 per MMBtu through the end of the storage refill season (October 31) and $5.59 in November and December. Spot prices (composites for producing-area hubs) averaged about $5.30 per MMBtu in the first quarter of this year but are currently near $6.00. Barring cooler-than-normal weather this summer, the likelihood appears small that spot prices will fall significantly below $5.65 per MMBtu for the rest of 2004. Overall in 2004, spot prices will likely average $5.62 per MMBtu and wellhead prices will average $5.33. In 2005, spot prices are expected to increase to $5.90 per MMBtu. As in other recent projections, this outcome depends on modest growth in domestic production and total available supply (including imports and storage inventories) in both 2004 and 2005. Underground storage facilities reported net injections of 199 Bcf for April, well above the previous 5-year average of 139 Bcf. At the end of April, storage stocks were only about 2 percent below the 5-year average level and 37 percent higher than last year at this time based on monthly survey data. Natural gas production is estimated to have increased by
approximately 0.5 percent in 2003. Growth of about 1 percent in 2004 is
expected as new natural gas well completions, which totaled an estimated
20,000 in 2003, continue to grow to nearly 24,000 wells per year over the
next 2 years. Natural gas demand is expected to increase by about 1.3 percent
in 2004, owing to economic growth, high oil prices, and high spot prices for
coal in eastern producing areas. Demand growth in 2005 is expected to be
minimal (0.3 percent) as some of the current pressure on natural gas in the
electric power sector eases and relative coal and fuel oil spot prices
decline somewhat.
Source: Energy Information Administration, Short-Term
Energy Outlook, May 2004. Need Help? |
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Energy Information Administration, EI 30 |
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