The U.S. Energy Information Administration raised its natural gas marketed production estimate for 2016 by 150 MMcf/d to an average of 77.5 Bcf/d.
However, this still represents a decline of 1.3 Bcf/d from the 2015 level, which would be the first annual production decline since 2005, the EIA said in its latest Short-Term Energy Outlook.
“In 2017, forecast natural gas production increases by an average of 2.5 Bcf/d from the 2016 level,” the agency said in the report.
The EIA also raised its 2017 Henry Hub spot natural gas price forecast from its previous short-term outlook.
Growing domestic natural gas consumption, along with higher pipeline exports to Mexico and liquefied natural gas (LNG) exports, contribute to the Henry Hub spot price rising from an average of $2.49/MMBtu in 2016 to $3.27/MMBtu in 2017, the agency said.
“NYMEX contract values for March 2017 delivery traded during the five-day period ending December 1 suggest that a price range from $2.20/MMBtu to $5.04/MMBtu encompasses the market expectation of Henry Hub natural gas prices in March 2017 at the 95% confidence level.”