A Web portal All About Energy source

U.S. Energy Information Administration: EIA expects high prices for natural gas this winter as global consumption remains high and inventories low

0

According to EIA’s September 2022 Short-Term Energy Outlook (STEO), the U.S. natural gas spot price at the Henry Hub will continue to climb this winter, reaching a monthly average of $9.10 per million British thermal units in January 2023. That price will be the highest inflation-adjusted monthly average price since 2008. Natural gas futures prices in Europe and Asia set records in August as pipeline exports from Russia to Europe reached their lowest level in 40 years and U.S. liquefied natural gas (LNG) exports remained limited due to the outage at the Freeport LNG facility.

EIA expects demand for natural gas to remain high despite high prices for the commodity.

“There are limited options for replacing natural gas in the short term, especially for electricity generation,” said EIA Administrator Joe DeCarolis. “We expect electricity producers—particularly in Europe—will have to generate some electricity from oil-based fuels this winter.”

As the United States approaches winter, EIA forecasts U.S. natural gas inventories will be 7% below their previous five-year average at the end of October. Natural gas is the primary source of heat for 46% of U.S. households.

EIA continues to forecast a decrease in average U.S. natural gas prices in 2023, as production increases.

Comments are closed.