Warmer-than-normal temperatures across much of the nation have driven natural gas spot prices downward, reducing the fuel's use for heating, federal energy officials said in a new report.
In this month's Short-Term Energy Outlook, the Energy Information Administration said the Henry Hub natural gas spot price averaged $2.64/million British thermal units (MMBtu) in April, down 31 cents/MMBtu from March. The warmer temperatures and lower heating use "contributed to above-average inventory injections during the month," the report said.
Natural gas prices could fall further. EIA said it expects "strong growth in U.S. natural gas production to put downward pressure on prices in 2019 and in 2020" and forecasts spot prices at Henry Hub to average $2.79/MMBtu in 2019, down 36 cents/MMBtu from 2018.
In this month's outlook, projections for the share of utility-scale electric generation from natural gas and coal power plants held steady compared to previous months. For natural gas, that share is expected to be 37 percent in 2019 and 38 percent in 2020, up from 35 percent in 2018. For coal, that share is projected to be 24 percent in 2019 and 22 percent in 2020, down from 27 percent last year.
Turning to the cost of gasoline at the pump, EIA revised its forecast for regular gasoline prices during the 2019 summer driving season, which runs from April through September. This month's report predicts an average of $2.92 per gallon this summer, compared to last month's projection of $2.76.
"The higher forecast for gasoline prices primarily reflect EIA's expectation of high gasoline refining margins this summer, despite slightly lower crude oil prices," the report said in reference to high production costs and low gasoline prices.
Renewable sources, including wind, solar and hydropower, are expected to produce 18 percent of electricity this year and almost 20 percent next year.