The federal government is bullish on the U.S. natural gas market even as it anticipates domestic natural gas production growth will outpace that of domestic demand.
In its latest "Short-Term Energy Outlook," released Feb. 6 the U.S. Energy Information Administration projects spot prices at Henry Hub will climb 7.0% in 2018 to average $3.20/MMBtu before declining 3.7% in 2019 to $3.08/MMBtu.
In the prior outlook, the EIA had projected spot prices would average $2.88/MMBtu and $2.92/MMbtu, respectively, in 2018 and 2019.
The EIA predicts dry natural gas production will climb 9.1% to average 80.30 Bcf/d in 2018, up from the prior outlook of 80.42 Bcf/d, as retail sales volumes climb 4.2% in 2018 to 77.44 Bcf/d, down from the prior outlook of 77.53 Bcf/d. The agency anticipates gross exports will climb 19.7% to average 10.40 Bcf/d, up from the prior forecast of 10.23 Bcf/d.
Gross pipeline imports are expected to slide from 8.1 Bcf/d the year prior to 7.9 Bcf/d, up from the prior outlook of 7.7 Bcf/d.
During the year, the EIA forecasts residential demand will average 12.88 Bcf/d, up from the prior forecast of 12.85 Bcf/d, while commercial sector demand averages 9.09 Bcf/d, up from the prior forecast of 9.04 Bcf/d, and industrial demand averages 21.75 Bcf/d, up from the prior forecast of 21.69 Bcf/d.
At the same time, the EIA trimmed its 2018 power-sector demand forecast, from 27.01 Bcf/d to 26.79 Bcf/d.
In 2019, the EIA forecasts dry gas production will climb 3.2% to reach 82.86 Bcf/d, down from the prior outlook of 83.02 Bcf/d, as retail sales volumes climb 2.3% to 79.20 Bcf/d, down from the prior outlook of 79.72 Bcf/d. The agency predicts gross exports will climb 23.9% to 12.89 Bcf/d, down from the prior forecast of 12.84 Bcf/d.
Meanwhile the EIA predicts gross pipeline imports will climb 3.8% to 8.2 Bcf/d in 2019, up from the prior outlook of 8.0 Bcf/d.
On the demand side, the government agency predicts residential sales will average 12.67 Bcf/d in 2019, down from the prior forecast of 12.80 Bcf/d, while commercial sales average 9.04 Bcf/d, against the prior outlook's projection of 9.00 Bcf/d, and industrial sales average 22.25 Bcf/d.
The EIA trimmed its 2019 power-sector demand outlook from 28.34 Bcf/d to 27.91 Bcf/d.
