US' 2023 natural gas prices projected to be 47% lower than 2022: EIA

Natural gas inventories are projected to remain above average through the summer. A warmer-than-normal start to the year has reduced natural gas consumption to below average, according to EIA’s February Short-Term Energy Outlook (STEO).

“US natural gas inventories fell by less than our expectations in January because of the warmer-than-average weather. With more natural gas in inventory, we reduced our forecast for natural gas prices over the coming year,” said EIA administrator Joe DeCarolis. “There is still a lot of uncertainty, including the possibility of extreme weather later this winter that could increase demand and temporarily slow down production, but those possibilities decrease as we approach spring.”

The EIA expects US electricity generation to decrease 2 per cent in 2023, with even larger reductions in coal-fired generation. Less electricity generation largely stems from reductions in consumption in the residential and industrial sectors. “We expect about 4 per cent less energy-related carbon dioxide emissions in 2023, which is driven largely by a 15 per cent decrease in emissions from coal this year,” added DeCarolis.

EIA expects that US coal exports will increase by about 2 per cent in 2023 and 9 per cent in 2024, largely to supply growing demand in Europe and Asia. Europe has been using more coal for electricity generation as the region looks to limit its consumption of natural gas from Russia. “Even as global demand for coal is growing, we expect that reduced US demand will lead to less coal production in the United States this year and in 2024,” he said in the EIA statement.

Russia and China remain sources of uncertainty in EIA’s STEO forecasts. Global demand for jet fuel has increased as China’s economy has opened up following pandemic lockdowns. Russia’s crude oil exports have largely gone unchanged since the European Union instituted a ban on seaborne crude oil imports from Russia.

Fibre2Fashion News Desk (NB)