The U.S. Energy Information Administration has slashed its forecast for Henry Hub natural gas spot prices this year due to warmer weather in winter across the country.
In its latest Short-Term Energy Outlook released on Tuesday, the agency said Henry Hub gas prices would average $3.03 per million British thermal units in 2017 and $3.45/MMBtu in 2018.
These estimates are down 40 cents and 25 cents, respectively, from forecasts in EIA’s February short-term outlook.
In February, the average Henry Hub natural gas spot price fell by 45 cents per MMBtu from the January levels to $2.85/MMBtu. Unseasonably warm temperatures in the Lower 48 states contributed to lower prices, the agency said.
U.S. dry natural gas production is expected to average 73.7 billion cubic feet per day in 2017, a 1.4 Bcf/d increase from the 2016 level.
This increase reverses a 2016 production decline, the first annual decline since 2005, EIA said.
EIA expects natural gas production in 2018 to rise by an average of 4.1 Bcf/d from the 2017 level.