Despite Requests To Down, US Natural Gas Production Predicts Recordprints In 2023

Illustration of natural gas production (Photo: Antanews)

JAKARTA - Despite the decline in demand, the US Energy Information Agency (EIA) of natural gas production in the US will hit a record high in 2023.

In a February Short-Term Energy Prospect Report, the agency estimates that production of dry gas will increase to 100.27 billion cubic feet per day (bcfd) this year and 101.68 bcfd in 2024 from a record 98.09 bcfd in 2022.

"The growth in natural gas production in the US has exceeded demand growth in recent months, helping to lower natural gas prices," the report notes.

Citing Antara, Wednesday, February 8, the price of natural gas spots at Henry Hub will reach an average of US$3.40 per million per UK thermal unit (MMBtu) by 2023, down nearly 50 percent from last year, the report's forecast, calling it a result of a much warmer than usual "weather" in January causing natural gas consumption to be reduced from normal to heating and driving supplies over an average of five years.

Temperatures across the United States in January were the lightest since 2006, according to the report.

Natural gas prices remain very volatile, the report said. "Extreme weather events and production freezes still have the potential to cause price spikes at the Henry Hub and in the regional market, but that potential is reduced as spring approaches, especially now that supplies have moved back over an average of five years (2018-2022)."

The EIA now expects US natural gas supplies to close the recall season by the end of March at more than 1.8 trillion cubic feet, 16 percent more than the five-year average.

In EIA estimates, US LNG exports will increase once Freeport facilities resume operations, and LNG exports will increase by 11 percent on an annual basis in 2023 compared to 2022.

Global liquid fuel consumption will increase by 1.1 million barrels per day (b/d) in 2023 and 1.8 million b/d in 2024, mainly driven by growth in China and other non-OECD countries, the report projects.

Based on the macroeconomic model of S&P Global, the US real GDP will contract slightly in the first half of 2023, partly due to the decline in housing fixed investment, but is expected to increase later this year and achieve an annual average of 2.1 percent by 2024, according to the report.