Tuesday, March 9, 2010

EIA Short-Term Outlook

The Energy Information Administration released its monthly Short-Term Energy Outlook for the U.S. today.  Below are some highlights for gas fans:
  • Consumption:  The EIA estimates that first quarter 2010 natural gas consumption will be 3% higher than last year and 17% higher than the five year average.  Last month's report estimated a 1.3% year-over-year decline for the first quarter.  The big difference has been cold weather, especially in the south, where natural gas use for power generation was up 10% over last year.
  • Production:  The EIA estimates natural gas production will decrease by 2.7% in 2010 and increase by 1.1% in 2011.  We'll see about that one.  The report's author didn't sound too confident about that projection either.
  • LNG imports:  While LNG imports are expected to be higher in Q1 2010 compared to last year, LNG imports for the year are expected to decrease by 45%, or 560 MMcf/day.  That's an interesting, although not unsurprising, observation given the amount of LNG export infrastructure coming online in key export nations this year.  Last year, experts predicted a tidal wave of LNG in 2010, but with the shale gas boom causing frightening storage constraints in the U.S., it is likely that the LNG exporters will continue to look elsewhere for customers.
  • Gas in storage:  The EIA expects the quarter to end with a working gas in storage balance of 1.549 Tcf, which is 3.5% higher than the five year average.  Given the current balance of 1.737 Tcf, that represents a net withdrawal of 188 Bcf over the next few weeks. 
  • Price: The EIA estimates that the Henry Hub spot price for gas will average $5.17/MMBtu in 2010 and $5.65/MMBtu in 2011. 

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