‹ Analysis & Projections

Short-Term Energy Outlook

Release Date: October 11, 2017  |  Next Release Date: November 7, 2017  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Natural Gas

Prices and storage: The front month futures price of natural gas for delivery at Henry Hub settled at $2.92 per million British thermal units (MMBtu) on October 5, a decrease of 15 cents/MMBtu from September 1 (Figure 8). Futures prices declined in early September, largely because of reduced demand related to Hurricane Irma in Florida. Most electricity generation in Florida is natural gas-fired, and electricity generation in Florida on September 11 was 41% lower than the average of the first seven days of September. Injections of working natural gas into underground storage exceeded market expectations and historical averages for the first three weeks in September, which further contributed to lower prices. The Henry Hub natural gas spot price averaged $2.98/MMBtu in September, 8 cents/MMBtu higher than in August.

Figure 8: U.S. natural gas prices and storage

As rising natural gas production keeps pace with increasing consumption and demand for exports—particularly for liquefied natural gas (LNG)—EIA projects a balanced market from the last quarter of 2017 through 2018 (Figure 9). LNG export capacity is expected to increase, with LNG exports projected to exceed 3 billion cubic feet per day (Bcf/d) in 2018, 66% higher than in 2017. In addition, increased takeaway capacity out of the Marcellus/Utica shale plays as a result of several new projects (such as the Rover and Nexus Gas Transmission pipelines) will help increase production. EIA forecasts a year-over-year increase in dry natural gas production of 4.9 Bcf/d in 2018 to a record of 78.5 Bcf/d.

Figure 9: Natural gas futures and ethane spot prices

U.S. Natural Gas Summary
  2015 2016 2017 2018
Prices (dollars per thousand cubic feet)
Henry Hub Spot 2.73 2.61 3.14 3.31
Residential Sector 10.36 10.04 11.10 10.99
Commercial Sector 7.90 7.29 8.02 8.13
Industrial Sector 3.93 3.52 4.24 4.39
Supply (billion cubic feet per day)
Marketed Production 78.83 77.81 78.99 84.44
Dry Gas Production 74.15 72.85 73.63 78.49
Pipeline Imports 7.20 7.97 7.99 8.13
LNG Imports 0.25 0.24 0.21 0.21
Consumption (billion cubic feet per day)
Residential Sector 12.64 11.87 12.00 12.77
Commercial Sector 8.77 8.48 8.62 8.97
Industrial Sector 20.61 21.10 21.28 21.86
Electric Power Sector 26.34 27.28 24.81 26.33
Total Consumption 74.64 75.10 73.11 76.84
Primary Assumptions (percent change from previous year)
Heating Degree Days -10.2 -5.1 0.7 7.5
Cooling Degree Days 14.6 4.8 -9.0 2.4
Commercial Employment 2.4 2.2 1.7 1.6
Natural-gas-weighted Industrial Production -2.0 1.1 2.6 3.1