WASHINGTON — The Henry Hub spot price averaged $4.42 per MMBtu in July, 13 cents lower than the previous month, according to the latest U.S. Energy Information Administration (EIA) short-term energy outlook. The administration now expects the Henry Hub price to average $4.24 per MMBtu in 2011, and $4.41 per MMBtu in 2012.
Production is expected to average 65.5 Bcf/d in 2011, a 3.7 Bcf/d (5.9%) increase over 2010. Growing domestic natural gas production has reduced reliance on imports and contributed to increased exports. EIA expects that inventories, though currently lower than last year, will come close to last year’s levels toward the end of the 2011 injection season despite the hot weather.
Meanwhile, EIA expects total natural gas consumption will grow by 1.8% to 67.4 billion cubic feet per day (Bcf/d) in 2011, the report says. Forecast industrial and electric power consumption growth make up most of the increase, with expected increases in 2011 to 18.4 Bcf/d (1.7%) and 21.0 Bcf/d (3.7%), respectively.
For route drivers, EIA reports a decline in the monthly average retail price of regular-grade gasoline from $3.91 per gallon in May to $3.65 per gallon in July. The administration expects prices to average $3.58 per gallon and $3.44 per gallon in the third and fourth quarters of 2011, respectively.
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