Short-Term Energy Outlook: NatGas Price Will Avg $3.27/Mcf in 2017

Once a month our favorite government agency, the U.S. Energy Information Administration (EIA), issues a Short-Term Energy Outlook (STEO). The EIA issued their latest edition on Tuesday. We have a full copy below. We’ve grabbed out the section on natural gas because it includes a couple of key points: (1) EIA predicts that natural gas production in the U.S. for 2016 will see a healthy decline over 2015 levels–1.3 billion cubic feet per day (Bcf/d) less in 2016. That’s the first annual production decline since 2005! (2) The EIA predicts the average price for natural gas at the benchmark Henry Hub will climb from $2.49/Mcf (thousand cubic feet) in 2016 to a whopping $3.27/Mcf in 2017. Why the jump? Growing domestic natural gas consumption, along with higher pipeline exports to Mexico and liquefied natural gas exports. Here’s the natgas section of the STEO, along with a copy of the full report…

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