For the fourth consecutive month, federal energy officials have lowered their forecast for Henry Hub natural gas spot prices.
In its latest “Short-Term Energy Outlook,” the Energy Information Administration said spot prices will average $2.21 per million British thermal units (MMBtu) this year, a 27-cent drop since November.
“In January, the Henry Hub natural gas spot price averaged $2.02/MMBtu, as warm weather contributed to below-average inventory withdrawals and put downward pressure on natural gas prices,” said the agency in its Feb. 11 report.
November spot prices were $2.48/MMBtu, followed by $2.45/MMBtu in December and $2.33/MMBtu in January.
As winter winds down starting in the second quarter of 2020, EIA expects prices at natural gas distribution pipelines to rise as “U.S. natural gas production declines and natural gas use for power generation increases the demand for gas.”
After carbon dioxide emissions fell by 2.3% in 2019, EIA forecasts an even larger decrease of 2.7% in 2020. “Declining emissions in 2020 reflect forecast declines in total U.S. energy consumption because of increases in energy efficiency and weather effects, particularly as a result of warmer-than-normal January temperatures,” the report said.
In 2021, EIA expects CO2 emissions to decline by 0.5% because of “a forecast return to normal temperatures. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.”
After 2031, the EIA expects CO2 emissions to resume their growth trajectory, “the consequence of more demand from the transportation and industrial sectors that is expected to boost consumption of oil and natural gas.”