Short-Term Energy Outlook

Natural Gas

In February, the Henry Hub natural gas spot price averaged $1.91 per million British thermal units (MMBtu). Warmer-than-normal temperatures in February reduced demand for space heating and put downward pressure on prices. EIA forecasts that prices will begin to rise in the second quarter of 2020 as U.S. natural gas production declines and natural gas use for power generation increases the demand for natural gas. EIA expects prices to average $2.22/MMBtu in the third quarter of 2020. EIA forecasts that Henry Hub natural gas spot prices will average $2.11/MMBtu in 2020. EIA expects that natural gas prices will then increase in 2021, reaching an annual average of $2.51/MMBtu.

U.S. dry natural gas production set a record in 2019, averaging 92.2 billion cubic feet per day (Bcf/d). Although EIA forecasts dry natural gas production will average 95.3 Bcf/d in 2020, a 3% increase from 2019, EIA expects monthly production to generally decline through 2020, falling from an estimated 96.5 Bcf/d in February to 92.3 Bcf/d in December. The falling production mostly occurs in the Appalachian and Permian regions. In the Appalachian region, low natural gas prices are discouraging producers from engaging in natural gas-directed drilling, and in the Permian region, low oil prices reduce associated gas output from oil-directed wells. In 2021, EIA forecasts dry natural gas production will rise from December 2020 levels in response to higher prices. Forecast dry natural gas production for 2021 averages 92.6 Bcf/d.

EIA estimates that total U.S. working natural gas in storage ended February at 2.1 trillion cubic feet (Tcf), 9% more than the five-year (2015–19) average. EIA forecasts that total working inventories will end March at 1.9 Tcf, 12% more than the five-year average. In the forecast, inventories rise by almost 2.1 Tcf during the April through October injection season to reach almost 4.0 Tcf on October 31.

U.S. Natural Gas Summary
	2018	2019	2020projected	2021projected
Prices	(dollars per thousand cubic feet)
Henry Hub Spot	3.27	2.66	2.19	2.60
Residential Sector	10.46	10.56	10.24	10.33
Commercial Sector	7.77	7.62	7.21	7.45
Industrial Sector	4.21	3.91	3.31	3.72
Supply	(billion cubic feet per day)
Marketed Production	89.93	99.19	102.51	99.85
Dry Gas Production	83.80	92.24	95.28	92.61
Pipeline Imports	7.70	7.36	7.00	7.12
LNG Imports	0.21	0.14	0.20	0.22
Consumption	(billion cubic feet per day)
Residential Sector	13.69	13.70	13.23	13.49
Commercial Sector	9.63	9.65	9.23	9.41
Industrial Sector	22.95	22.98	24.47	24.43
Electric Power Sector	29.01	30.98	32.39	30.31
Total Consumption	82.40	84.97	87.27	85.61
Primary Assumptions	(percent change from previous year)
Heating Degree Days	11.8	0.7	-6.5	4.1
Cooling Degree Days	11.0	-5.2	-6.1	-1.0
Commercial Employment	1.5	1.4	1.5	1.0
Natural-gas-weighted Industrial Production	2.6	-0.4	0.0	0.2

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Related Tables
Table WF01. Average Consumer Prices and Expenditures for Heating Fuels During the Winter	PDF
Table 1. U.S. Energy Markets Summary	PDF
Table 2. Energy Prices	PDF
Table 5a. U.S. Natural Gas Supply, Consumption, and Inventories	PDF
Table 5b. U.S. Regional Natural Gas Prices	PDF
Table 8a. U.S. Renewable Energy Consumption	PDF
Table 8b. U.S. Renewable Electricity Generation and Capacity	PDF
Table 9a. U.S. Macroeconomic Indicators and CO₂ Emissions	PDF
Table 9b. U.S. Regional Macroeconomic Data	PDF
Table 9c. U.S. Regional Weather Data	PDF

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
U.S. census regions and census divisions	XLSX	PNG

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