AGA Expects Stable Gas Prices, Increased Winter Demand in US
Natural gas consumers in the US can expect to pay about 5% more for their natural gas needs this winter heating season, reflecting growing domestic production and exports and a winter forecast calling for temperatures about 13% colder than last year.
That’s the prediction from the American Gas Association (AGA), which presented its annual Winter Outlook October 18 in Washington.
“We are entering the third winter heating season following the extreme cold of 2013-2014 which included the polar vortex,” said Chris McGill, the AGA’s vice-president, energy analysis and standards. “We expect to see temperatures this winter that are more near normal – not as cold as three winters ago, but not as warm as last year. This accounts for an expectation of 3% more consumption and an estimated five percent increase in overall bills.”
The National Weather Service, he said, estimates the 2017-2018 winter heating season, which extends from November 1 to March 31, will have 3,468 heating degree days, 13% more than last winter but 1% fewer than normal. Spot gas prices will continue to hover around $3/mn Btu, while residential prices are forecast to rise about 2.5%, McGill added.
“Americans may use slightly more natural gas this winter to heat their homes, but people are not likely to see a very different bill from what they have seen over the past seven years.”
McGill attributed the relative stability to a combination of factors: domestic production is expected to continue to increase, natural gas demand for power generation is about 3bn ft³/day lower than last year, and storage injections have been relatively modest.
At the same time, pipeline imports from Canada are predictable, exports to Mexico have been consistently in the 4bn ft³/day range and LNG exports are projected to continue climbing, as Cheniere Energy adds more trains at its Sabine Pass project in Louisiana and Dominion Energy commissions its 5.25mn metric tons/year Cove Point terminal in Maryland later this year.