19 January 2023 | Other

EIA: Production growth will keep natural gas prices in check

On Wednesday, the U.S. Energy Information Administration (EIA) reported that prolonged 

growth in U.S. natural gas production will outpace domestic demand and exports this couple of years. As a result, the average U.S. benchmark price will be lower than in 2022.

The EIA expects the U.S. Henry Hub base price to average $4.90 per million British thermal units (MMBtu) this year. The projected average will be more than $1.50 less than natural gas prices from last year.

Henry Hub prices are expected to remain nearly the same in 2024 compared to 2023 levels as U.S. production continues to grow, the EIA said.

This year, prices will likely average close to $5.00/MMBtu in the first quarter. It will be driven by higher demand during colder times. The expected figures will also be formed by LNG exports in volumes close to production capacity. According to the EIA, the return of Freeport LNG after the June 2022 fire will also result in higher demand for natural gas in the first reported period this year.

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