Dive Brief:
- Natural gas prices continue to fall and are approaching the lowest levels in two years, as mild weather keeps demand down and helps producers boost their output.
- The U.S. Energy Information Administration reported working gas in storage was 3,295 Bcf, which is 6 Bcf higher than last year but 258 Bcf below the 5-year storage average.
- The EIA said it expects total natural gas consumption to decline next year as lower residential and commercial consumption offset increases in the electric power and industrial sectors.
Dive Insight:
A warm December has muted demand and sent natural gas prices tumbling. According to the Wall Street Journal, natural gas prices are approaching their lowest point in two years while the industry is producing about 8 Bcf/d more than it was a year ago.
According to EIA's most-recent short term energy outlook, Henry Hub natural gas spot prices will average $3.98/MMBtu this winter.
Total natural gas consumption this year has average almost 74 Bcf/d, an increase of 3.2% But the agency said it expects consumption to decline next year as lower residential and commercial consumption offset increases in the electric power and industrial sectors.Natural gas consumption in the power sector is expected to average 22.1 Bcf/d in 2014, a 0.8% decline compared to last year, reflecting higher natural gas prices this year. EIA expects natural gas consumption in the power sector to increase to 22.7 Bcf/d in 2015.
According to oil and gas consulting firm EnerCom, gas prices will fall to near the $3/MMBtu range in July 2015 after staying above $4/MMBtu through April.
