WASHINGTON — While natural gas working inventories reached an all-time weekly record in early November, weather forecasts predicting a winter much colder than last year’s mild season imply that large increases in natural gas use for heating are to come, according to this month’s Short-Term Energy Outlook from the U.S. Energy Information Administration (EIA).
Overall natural gas consumption in late October and early November showed little response to Hurricane Sandy, which hit the Northeast on Oct. 29. Declines in natural gas-fired generation because of electric power outages may have been somewhat mitigated by power producers substituting natural gas for shut-down nuclear capacity resulting from the storm. Most effects appear to have been short-lived, and EIA didn’t substantially adjust its forecast as a result, the report indicates.
EIA expects the Henry Hub natural gas spot price, which averaged $4.00 per million British thermal units (MMBtu) in 2011, will average $2.78 per MMBtu in 2012 and $3.68 per MMBtu in 2013.
U.S. monthly average regular gasoline retail prices fell from $3.85 per gallon in September to $3.45 per gallon in November, as crude oil prices fell and the gasoline market transitioned from summer‐grade to lower-cost winter‐grade gasoline specifications.
Projected national average regular gasoline retail prices average $3.63 per gallon in 2012 and $3.43 per gallon in 2013, compared with $3.53 per gallon in 2011. Forecast diesel fuel retail prices average $4.02 per gallon during the fourth quarter of 2012 before falling to an average of $3.84 per gallon in 2013.