Commodities Buzz: US Natural Gas Inventories Expected To Stay Tight In Coming Weeks

The US Energy Information Administration (EIA) noted in a latest update yesterday that dry natural gas production in the United States averaged 85.1 billion cubic feet per day (Bcf/d) in September, up 0.6 Bcf/d from August. EIA forecasts that dry natural gas production will average 82.7 Bcf/d in 2018, up by 7.9 Bcf/d from 2017 and establishing a new record high. EIA expects natural gas production will continue to rise in 2019 to an average of 87.7 Bcf/d.

EIA forecasts that US natural gas storage inventories will total 3.3 trillion cubic feet (Tcf) at the end of October. This level would be 14% lower than both the 2017 end-of-October level and the five-year (2013–17) average for the end of October, and it would also mark the lowest level for that time of year since 2005.

EIA expects Henry Hub natural gas spot prices to average $ 2.99/million British thermal units (MMBtu) in 2018 and $ 3.12/MMBtu in 2019. NYMEX futures and options contract values for January 2019 delivery that traded during the five-day period ending October 4, 2018, suggest a range of $ 2.22/MMBtu to $ 4.85/MMBtu encompasses the market expectation for January Henry Hub natural gas prices at the 95% confidence level.