EIA revises 2015 natural gas price outlook lower

OREANDA-NEWS. February 11, 2015. The US Energy Information Administration (EIA) has revised its 2015 natural gas spot price outlook lower amid rising production and a sluggish withdrawal season.

Spot prices at the Henry Hub this year should average \\$3.05/mmBtu, down by \\$1.34/mmBtu from the 2014 average and 39?/mmBtu lower than the EIA's January forecast, according to the agency's monthly Short-Term Energy Outlook.

Lower gas prices should boost 2015 gas use for power generation, the top-consuming sector of the US market, to 23.08 Bcf/d (654mn m?), an increase of 5.5pc from a year earlier, the EIA said.

US natural gas production has surged this year as producers continue to tap the Marcellus shale, a prolific gas-bearing field mostly in West Virginia and Pennsylvania. In addition, new oil wells in fields such as south Texas' Eagle Ford shale have buoyed production because they often produce large amounts of gas.

Marketed gas production is forecast this year to reach 77.28 Bcf/d, up by 3.8pc from a year earlier and 0.7pc higher than the outlook last month. Rising domestic output and mild weather have contributed to smaller-than-average draws from gas storage this winter.

Draws from US gas storage since early November have totaled 1.183 Tcf, down by 15pc from the five-year average of 1.391 Tcf, according to EIA data. Inventories should exit the winter on 31 March at 1.699 Tcf, or 43 Bcf above the five-year average, the agency said today.