U.S. dry natural gas production averaged 73.6 billion cubic feet per day (Bcf/d) in 2017, and is forecast to reach 80.3 Bcf/d in 2018, establishing a new record, STEO, the Energy Information Administration’s just-released Short-Term Energy Outlook, projects.
That level would be 6.7 Bcf/d higher than the 2017 level, and the forecast 2017 growth would be the highest annual average growth on record, Kallanish Energy reports.
EIA expects natural gas production will also increase in 2019, with forecast growth of 2.6 Bcf/d, to 82.9 Bcf/d.
In January, the U.S. benchmark Henry Hub natural gas spot price averaged $3.88 per million British thermal units (MMBtu), up $1.06/MMBtu from December.
Cold temperatures east of the Rocky Mountains in early January contributed to high levels of natural gas consumption as well as a reduction in production because of well freeze-offs.
This combination resulted in record-high natural gas inventory withdrawals in mid-January, which contributed to rising prices.
EIA expects natural gas prices to moderate in coming months, based on a forecast of record growth in natural gas production. EIA expects Henry Hub spot prices to average $3.34/MMBtu in February, and $3.20/MMBtu for all of 2018.
In 2019, EIA forecasts prices will average $3.08/MMBtu.
NYMEX (New York Mercantile Exchange) contract values for May 2018 delivery that traded during the five-day period ending Feb. 1, suggest a range of $2.26/MMBtu to $3.67/MMBtu encompasses the market expectation for May Henry Hub natural gas prices at the 95% confidence level.