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Short-Term Energy Outlook

Release Date: January 9, 2018  |  Next Release Date: February 6, 2018  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Natural Gas

The front-month natural gas futures contract for delivery at Henry Hub settled at $2.88/million British thermal units (MMBtu) on January 4, a decrease of 18 cents/MMBtu from December 1 (Figure 4). U.S. dry natural gas production continued to reach record levels, with year-over-year increases estimated at nearly 7 billion cubic feet per day (Bcf/d) in December. The rising production, along with temperatures that averaged 9% warmer than normal for the first three weeks of December, contributed to front-month futures prices on December 21 falling to the lowest level since February 2017. Much colder-than-normal temperatures at the end of December and the beginning of January resulted in estimates of record-high natural gas demand and helped to reverse the price decline. The Henry Hub natural gas spot price averaged $2.81/MMBtu in December, 20 cents/MMBtu lower than November.

Figure 4: Natural gas front month futures prices and actual minus historical average HDD and CDD

U.S. Natural Gas Summary
  2016201720182019
Prices (dollars per thousand cubic feet)
Henry Hub Spot 2.613.102.993.03
Residential Sector 10.0411.1210.7010.77
Commercial Sector 7.297.947.847.87
Industrial Sector 3.524.174.084.13
Supply (billion cubic feet per day)
Marketed Production 77.8178.8886.4489.46
Dry Gas Production 72.8573.5780.4283.02
Pipeline Imports 7.977.977.708.02
LNG Imports 0.240.200.210.22
Consumption (billion cubic feet per day)
Residential Sector 11.8711.9612.8512.80
Commercial Sector 8.488.619.049.00
Industrial Sector 21.1021.4421.6922.25
Electric Power Sector 27.2825.6427.0128.34
Total Consumption 75.1074.0477.5379.72
Primary Assumptions (percent change from previous year)
Heating Degree Days -5.1-1.711.2-0.6
Cooling Degree Days 4.6-8.5-4.10.2
Commercial Employment 2.21.71.41.2
Natural-gas-weighted Industrial Production 1.13.03.43.7