The U.S. Energy Information Administration raised its natural gas marketed production estimate for 2016 by 150 MMcf/d to an average of 77.5 Bcf/d.
However, this still represents a decline of 1.3 Bcf/d from the 2015 level, which would be the first annual production decline since 2005, the EIA said in its latest Short-Term Energy Outlook.
“In 2017, forecast natural gas production increases by an average of 2.5 Bcf/d from the 2016 level,” the agency said in the report.
The EIA also raised its 2017 Henry Hub spot natural gas price forecast from its previous short-term outlook .
Growing domestic natural gas consumption, along with higher pipeline exports to Mexico and liquefied natural gas (LNG) exports, contribute to the Henry Hub spot price rising from an average of $2.49/MMBtu in 2016 to $3.27/MMBtu in 2017, the agency said.
“NYMEX contract values for March 2017 delivery traded during the five-day period ending December 1 suggest that a price range from $2.20/MMBtu to $5.04/MMBtu encompasses the market expectation of Henry Hub natural gas prices in March 2017 at the 95% confidence level.”