The U.S. Energy Information Administration (EIA) estimates that U.S. natural gas consumption reached a record high in January at 118 billion cubic feet per day (Bcf/d). A burst of cold weather increased demand for heating and reduced natural gas production, which led to high inventory withdrawals.
According to its February Short-Term Energy Outlook (STEO), EIA expects natural gas inventories to remain above the previous five-year average, despite the high withdrawals in January. EIA expects about 15% higher U.S. natural gas inventories at the end of this winter compared with the previous five-year average because of forecast milder weather.
EIA expects U.S. natural gas production to increase in February, reach 105 Bcf/d in March, and stay close to that level for the rest of 2024. As a result, EIA expects prices to fall from January’s average of $3.18 per million British thermal units (MMBtu) to about $2.40/MMBtu in February and March.
“The cold weather last month sent us into record-setting natural gas consumption territory for a few days, but we expect less-than-average consumption going into February and March,” said EIA Administrator Joe DeCaro
lis. “Any late-winter cold snaps could introduce significant volatility back into the natural gas market.”
Other highlights from the February STEO include:
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