While annual dry gas production in the U.S. is expected to finish 10% of last year, gas production is likely to slow somewhat in 2020, according to the Short-Term Energy Outlook released by the U.S. Energy Information Agency (EIA).
EIA forecasts that annual U.S. dry natural gas production will finish at an average 92.1 bcfd in 2019, up 10% from 2018. But the agency expects slower growth in 2020 because of the lag between changes in price and changes in future drilling activity. Low prices in the third quarter of 2019 will reduce natural gas-directed drilling in the first half of 2020, the agency said. Overall, EIA forecasts natural gas production in 2020 will average 95.1 bcfd.
EIA estimates that the U.S. total working gas inventories were 3.6 tcf at the end of November. This level was about equal to the five-year (2014–18) average and 19% higher than a year ago. EIA expects storage withdrawals to total 1.9 tcf from the end of October to the end of March, which is less than the five-year average winter withdrawal. A withdrawal of this amount would leave the end-of-March inventories at almost 1.9 tcf, which would be 8% higher than the five-year (2015–19) average.
The U.S. benchmark Henry Hub natural gas spot price averaged $2.64 per million British thermal units (MMBtu) in November, up 31 cents/MMBtu from October. Prices increased as a result of November temperatures that were colder than the 10-year (2009–18) average. EIA forecasts the Henry Hub spot price to average $2.45/MMBtu in 2020, down 14 cents/MMBtu from the 2019 average.