‹ Analysis & Projections

Short-Term Energy and SUmmer Fuels Outlook

Release Date: April 11, 2017  |  Next Release Date: May 9, 2017  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Natural Gas

Prices: The front-month natural gas futures contract for delivery at Henry Hub settled at $3.33 per million British thermal units (MMBtu) on April 6, an increase of 53 cents/MMBtu from March 1 (Figure 8). A brief but unseasonably cold period in the middle of March contributed to an increase in natural gas futures prices for the month. Heating degree days for the week ending March 16 were 23% higher than normal. In March, the Henry Hub spot price averaged $2.88/MMBtu, more than $1/MMBtu above the average of $1.73/MMBtu in March 2016.

Figure 8: Cooling Degree Days

U.S. working natural gas inventories on March 31, the traditional end of the withdrawal season, were 15% above the five-year average, but 17% below last year's record-high level at the end of March. Winter 2015–16 and winter 2016–17 were both unseasonably warm, but natural gas drawdowns were higher this season because of lower natural gas production and higher exports. In 2017, EIA expects exports to increase more than production, which will move inventories closer to the five-year average by the time heating seasons begins (Figure 9). The narrowing of inventory levels to the five-year average is reflected in the forecast for rising natural gas prices.

Figure 9: Brent and WTI Net Money Manager Positions


U.S. Natural Gas Summary
  2015 2016 2017 2018
Prices (dollars per thousand cubic feet)
Henry Hub Spot 2.72 2.60 3.20 3.57
Residential Sector 10.36 10.05 10.86 11.09
Commercial Sector 7.90 7.26 7.99 8.30
Industrial Sector 3.91 3.51 4.35 4.74
Supply (billion cubic feet per day)
Marketed Production 78.78 77.31 78.32 82.82
Dry Gas Production 74.14 72.30 73.09 77.07
Pipeline Imports 7.20 7.96 7.99 8.17
LNG Imports 0.25 0.24 0.22 0.21
Consumption (billion cubic feet per day)
Residential Sector 12.63 12.00 12.15 12.76
Commercial Sector 8.76 8.54 8.53 8.99
Industrial Sector 20.64 21.10 21.17 21.59
Electric Power Sector 26.34 27.28 25.24 26.07
Total Consumption 74.65 75.13 73.34 76.06
Primary Assumptions (percent change from previous year)
Heating Degree Days -10.2 -5.2 1.4 7.8
Cooling Degree Days 14.6 4.8 -9.9 -3.5
Commercial Employment 2.4 2.2 1.9 1.4
Natural-gas-weighted Industrial Production 1.3 0.6 2.8 3.4