Short-Term Energy Outlook

Natural Gas

In August, the Henry Hub spot price averaged $8.80 per million British thermal units (MMBtu), up from $7.28/MMBtu in July. Natural gas prices rose in August because of continued strong demand for natural gas in the electric power sector, which has kept natural gas inventories below their five-year (2017–2021) average. We expect the Henry Hub price to average about $9/MMBtu in 4Q22 and then fall to an average of about $6/MMBtu in 2023 as U.S. natural gas production rises.

U.S. natural gas inventories ended August at 2.7 trillion cubic feet (Tcf), which was 12% below the five-year average. We forecast that inventories will end the injection season (April through October) at more than 3.4 Tcf, which would be 7% below the five-year average.

U.S. LNG exports in our forecast average 11.7 billion cubic feet per day (Bcf/d) in 4Q22, up 1.7 Bcf/d from 3Q22. Factors that will affect the volume of LNG exports in the coming months include the planned outage at Cove Point in October and Freeport LNG resuming partial operations by mid- to late-November. We forecast LNG exports will average 12.3 Bcf/d in 2023.

U.S. consumption of natural gas in our forecast averages 86.6 Bcf/d in 2022, up 3.6 Bcf/d from 2021, driven by increases across all consuming sectors. We expect consumption to fall by 1.9 Bcf/d in 2023 because of declines in consumption in the industrial and electric power sectors.

Dry natural gas production has been rising relatively steadily since 1Q22, when it averaged 94.6 Bcf/d. We forecast U.S. dry natural gas production to average 99.0 Bcf/d in 4Q22 and then rise to 100.4 Bcf/d for 2023.

U.S. Natural Gas Summary
	2020	2021	2022projected	2023projected
Prices	(dollars per thousand cubic feet)
Henry Hub Spot	2.11	4.06	7.66	6.24
Residential Sector	10.76	12.27	15.40	16.36
Commercial Sector	7.49	8.82	11.61	12.24
Industrial Sector	3.32	5.50	8.56	7.70
Supply	(billion cubic feet per day)
Marketed Production	98.91	101.40	105.65	109.18
Dry Gas Production	91.49	93.55	97.09	100.36
Pipeline Imports	6.84	7.63	7.88	7.40
LNG Imports	0.13	0.06	0.06	0.06
Consumption	(billion cubic feet per day)
Residential Sector	12.77	12.75	13.64	13.62
Commercial Sector	8.66	8.94	9.69	9.69
Industrial Sector	22.27	22.46	22.86	21.91
Electric Power Sector	31.75	30.88	32.09	30.99
Total Consumption	83.27	82.97	86.56	84.63
Primary Assumptions	(percent change from previous year)
Heating Degree Days	-9.3	0.5	7.5	-0.7
Cooling Degree Days	1.5	-1.6	1.7	-9.7
Commercial Employment	-6.7	3.7	4.8	1.8
Natural-gas-weighted Industrial Production	-7.7	4.5	2.5	1.2

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Related Figures
Henry Hub natural gas price	XLSX	PNG
U.S. natural gas prices	XLSX	PNG
U.S. marketed natural gas production	XLSX	PNG
U.S. natural gas consumption	XLSX	PNG
U.S. natural gas balance	XLSX	PNG
U.S. natural gas trade	XLSX	PNG
U.S. working natural gas in storage	XLSX	PNG
U.S. electricity generation by fuel, all sectors	XLSX	PNG
U.S. carbon dioxide emissions growth	XLSX	PNG
U.S. winter heating degree days	XLSX	PNG
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