The U.S. Energy Information Administration raised its forecast for Henry Hub natural gas spot prices this year due to new export capabilities and rising domestic consumption.
In its latest Short-Term Energy Outlook released on Tuesday, the agency said Henry Hub gas prices would average $3.10 per million British thermal units in 2017 and $3.45/MMBtu in 2018.
The 2017 estimate is up 7 cents while the forecast for 2018 stayed steady at $3.45/MMBtu as compared to forecasts in EIA’s February short-term outlook.
In March, the average Henry Hub natural gas spot price was $2.88/MMBtu, 3 cents above the February level. Prices increased as temperatures in March returned to more seasonally typical levels after being significantly warmer than normal in February, the agency said.
U.S. dry natural gas production is forecast to average 73.1 billion cubic feet per day (Bcf/d) in 2017, a 0.8 Bcf/d increase from the 2016 level.
This increase reverses a 2016 production decline, which was the first annual decline since 2005, EIA said.
EIA expects natural gas production in 2018 to be 4.0 Bcf/d above the 2017 level.