July 13 The United States will transition from a net importer of natural gas to a net exporter of the fuel by the second half of 2017 as its shale gas output continues to grow, data this week from the U.S. Energy Information Administration said.
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EIA lowered its natural gas consumption estimate in fourth-quarter 2016 by 0.33 Bcf/d to 79.34 Bcf/d.
Natural gas futures were up 0.5% ahead of the inventory report, but fell in the aftermath and ended up closing Thursday’s session with a 0.4% loss at $2.7227 per million British thermal units.
“Notably, the natural gas share of power generation is expected to decline for several years after 2016 as it competes with renewables and as natural gas prices rise”.
The agency raised its forecast for third-quarter Henry Hub natural gas spot prices to $2.71/MMBTU, 42 cents above its June estimate. The increase came on the back of greater demand from the power generation sector and lower production.
Last week, the EIA reported a 39-Bcf injection that increased inventories to 3.179 Tcf, which was 20.4% more than the year-ago inventory of 2.641 Tcf, and 23.2% more than the five-year average of 2.580 Tcf.
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Weather forecasts are projecting a heat dome to settle over most of the country next week, likely sending temperatures, power demand and natural gas prices higher. “Although U.S. natural gas exports are increasing, there are still abundant supplies to meet domestic demand as natural gas inventories are expected to be at a record high for the start of the upcoming winter heating season”, he said.
