U.S. dry natural gas production will average 91.3 billion cubic feet per day (Bcf/d) in 2019, up 8.0 Bcf/d from the previous record set in 2018, the Energy Information Administration projects in the just-released July Short-Term Energy Outlook (Steo), Kallanish Energy reports.
EIA/Steo expects annual average U.S. natural gas production will rise by 1.4 Bcf/d in 2020.
Henry Hub natural gas spot prices will average $2.50 per million British thermal units (MmBtu) in the second half of 2019, and $2.77/MmBtu in 2020.
EIA’s forecast for the second half of 2019 is 29 cents/MmBtu lower than forecast in the June Steo. The lower forecast reflects recent price declines and EIA’s updated assessment of U.S. drilling activity and average well productivity.
EIA’s forecast for the average Henry Hub price for December 2019, of $2.80/MmBtu should be considered in the context of Nymex Henry Hub futures and options contract values for December 2019 delivery that traded during the five-day period ending July 3.
These contracts suggest a range of $1.64/MmBtu to $4.03/MmBtu encompasses the market expectation for December Henry Hub natural gas prices at the 95% confidence level.
This post appeared first on Kallanish Energy News.