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Short-Term Energy Outlook

Release Date: January 14, 2020  |  Next Release Date: February 11, 2020  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Natural Gas

Prices: The front-month natural gas futures contract for February delivery at the Henry Hub settled at $2.17 per million British thermal units (MMBtu) on January 9, 2020, down 16 cents/MMBtu from December 2, 2019 (Figure 4). Prices traded in an overall band of 37 cents/MMBtu in December, the narrowest December trading band on record going back to 1990. December was significantly warmer than normal, which is evidenced by the sharp drop in heating-degree days (HDD) below the normal number for December in Figure 4. December 2018 followed a similar pattern when milder-than-normal temperatures led to declining prices. However, this year’s inventory levels are much higher. Natural gas inventories on January 3, 2020 were 19.8% higher than this time last year, which contributed to the lowest natural gas futures prices in January since 2016.

Figure 4: Natural gas front-month futures prices and actual minus historical average HDD and CDD

U.S. Natural Gas Summary
  2018201920202021
Prices (dollars per thousand cubic feet)
Henry Hub Spot 3.272.662.422.63
Residential Sector 10.4610.6610.2510.39
Commercial Sector 7.777.687.377.52
Industrial Sector 4.213.903.523.74
Supply (billion cubic feet per day)
Marketed Production 89.9398.99102.06101.60
Dry Gas Production 83.8092.0394.7494.11
Pipeline Imports 7.707.307.067.12
LNG Imports 0.210.160.200.22
Consumption (billion cubic feet per day)
Residential Sector 13.6913.8413.7713.67
Commercial Sector 9.639.629.469.36
Industrial Sector 22.9523.1424.1924.21
Electric Power Sector 29.0131.0331.4430.45
Total Consumption 82.4085.2886.7385.70
Primary Assumptions (percent change from previous year)
Heating Degree Days 11.80.1-1.8-0.7
Cooling Degree Days 10.9-5.4-6.20.0
Commercial Employment 1.61.71.31.0
Natural-gas-weighted Industrial Production 2.6-0.5-0.80.4