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    EIA sees gas price slump persisting through 2024


Storage volumes will end winter season 30% above average, keeping a firm lid on prices this year.

by: Dale Lunan

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EIA sees gas price slump persisting through 2024

The US Energy Information Administration (EIA) said March 12 it is projecting weak natural gas prices to continue through 2024, and is forecasting the benchmark Henry Hub spot to average about $2.25/mnBtu for the year, a 10% drop from 2023 and a 65% plunge from 2022.

The agency, an arm of the US Department of Energy, reported in its March Short-Term Energy Outlook (STEO) that storage inventories this year will be 30% higher than average at the end of the winter season – March 31 – in the wake of warmer than expected temperatures and a resulting decline in demand and storage withdrawals.

With weak prices, the EIA is expecting US domestic gas production to fall slightly from record highs last year, to 103.35bn ft3/day from 103.79bn ft3/day. Production is forecast to rebound next year, to 104.43bn ft3/day. 

“Some producers have announced curtailments in production or reductions in upstream spending on natural gas-directed activities this year,” EIA Administrator Joe DeCarolis said. “But with so much domestic natural gas production tied to growing crude oil production, we expect natural gas production to decrease far more slowly than prices have.”

CNX Resources said March 12 it expects to produce less this year as it delays some well completion activities, while EQT, the largest US gas producer, said last week it would cut production by about 1bn ft3/day starting from late February and continuing through March. In February, Chesapeake Energy said it would spend less on drilling and completions this year, leading to production falling to 2.7bn ft3/day in 2024 from 3.5bn ft3/day in 2023.