US agency sees higher natural gas prices after Ida
The US Energy Information Administration (EIA) said September 8 it was expecting higher natural gas prices over the coming months as the industry struggles to recover from the impacts of Hurricane Ida.
In its September Short-Term Energy Outlook (STEO), the EIA said it was raising its fourth quarter forecast for Henry Hub spot prices by 16% from its August forecast, to $4.00/mn Btu. It also raised its 2022 forecast by 13%, to $3.47/mn Btu.
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“Hurricane Ida affected natural gas production at a time [when] the US was already experiencing higher natural gas prices due to growth in exports, strong domestic natural gas consumption, and relatively flat natural gas production,” EIA acting administrator Steve Nalley said. “Lost production from the storm combined with these current market conditions has limited our ability to build up natural gas inventories, and we expect that will keep prices higher in the short term than we had previously thought.”
As of September 7, the US Bureau of Safety and Environment Enforcement was estimating that about 1.7bn ft3/day of offshore production from the Gulf of Mexico remained shut-in as producers assessed damage from Ida.
Offshore natural gas production is forecast to average about 1.5bn ft3/day in September, before recovering to 2.1bn ft3/day in the fourth quarter, the EIA said. August production from the Gulf averaged 1.9bn ft3/day, down from 2.3bn ft3/day in July.