EIA: Henry Hub spot price drops, production remains high
The U.S. Henry Hub natural gas spot price averaged $2.78/million British thermal units (MMBtu) in June, a decrease of 7 cents/MMBtu from the May price.
The Energy Information Agency expects monthly average spot prices to remain lower than $3/MMBtu in July, and lower than $4/MMBtu through the remainder of the forecast.
The projected Henry Hub natural gas price averages $2.97/MMBtu in 2015 and $3.31/MMBtu in 2016, according to EIA’s latest Short-Term Energy Outlook.
Natural Gas Production and Trade
EIA expects that marketed natural gas production will increase by 4.3 Bcf/d (5.7%) and by 1.6 Bcf/d (2.0%) in 2015 and 2016, respectively.
Despite recent declines, natural gas production remains high, and EIA expects continued growth through 2016, with increases in the Lower 48 states expected to more than offset long-term production declines in the Gulf of Mexico.
Increases in drilling efficiency will continue to support growing natural gas production in the forecast despite relatively low natural gas prices.
Most of the growth is expected to come from the Marcellus Shale, as the backlog of uncompleted wells is reduced and new pipelines come online to deliver Marcellus natural gas to markets in the Northeast.
Increases in domestic natural gas production are expected to reduce demand for natural gas imports from Canada and to support growth in exports to Mexico.
EIA expects natural gas exports to Mexico, particularly from the Eagle Ford Shale in South Texas, to increase because of growing demand from Mexico’s electric power sector, coupled with flat Mexican natural gas production.
EIA projects LNG gross exports will increase to an average of 0.79 Bcf/d in 2016, with the startup of a major LNG liquefaction plant in the Lower 48 states.
LNG World News Staff