EIA forecasts lower wholesale US natural gas prices in 2023, 2024

20 Jan '23

2 min read

Pic: Shutterstock

In its January short-term energy outlook (STEO), the US Energy Information Administration (EIA) has forecast the natural gas spot price at the US benchmark Henry Hub at an average $4.90 per million British thermal units (MMBtu) this year, more than $1.50/MMBtu lower than the 2022 average.

It expects prices to stay nearly the same in 2024 as dry natural gas production continues to grow in the United States and outpaces domestic natural gas demand and exports for most of the year.

The Henry Hub price will average close to $5.00/MMBtu in the first quarter of 2023; both winter weather and liquefied natural gas (LNG) exports at near-capacity volumes will lead to greater natural gas demand, which will result in higher prices in the United States, EIA said in a press release.

After a warm start to January, EIA expects colder winter weather to return, prompting higher natural gas consumption for space heating in the residential and commercial sectors, which causes prices to rise.

It also expects the Freeport LNG export facility in South Texas, which shut down in June due to a fire, to resume operations in the first quarter of the year. Resuming export shipments from Freeport LNG will add approximately 2 billion cubic feet per day (Bcf/d) to overall US natural gas demand, which also contributes to higher first-quarter prices.

EIA expects natural gas prices to decline in the second quarter of 2023, then stay relatively flat for the rest of the year as a result of winter weather subsiding; reducing domestic consumption; US LNG exports remaining flat once Freeport LNG comes back online; and dry natural gas production continuing to rise.

It expects domestic natural gas production to increase by about 2 per cent this year, averaging between 100 Bcf/d and 101 Bcf/d for the year.

Fibre2Fashion News Desk (DS)

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