US Natural Gas Seen Under $3.50 By 2022 As Output Quickens - EIA

WASHINGTON (Pakistan Point News / Sputnik - 09th September, 2021) US natural gas prices are expected to fall from 7-� year highs above $5 per million metric British thermal units to below $3.50 by next year amid a production hike and a drop in exports of liquefied natural gas, the Energy Information Administration said on Wednesday.

"We expect the Henry Hub spot price will average $4.00/MMBtu in 4Q21, as the factors that drove prices higher during August lessen," the EIA said in its Short-Term Energy Outlook Report for September.

It said the Henry Hub, where futures of gas were traded, was expected to experience another price hike to $4.25/mmBtu in January at the peak of winter demand for heating.

But from there, it was expected to "generally decline through 2022, averaging $3.47/MMBtu for the year amid rising US natural gas production and slowing growth in LNG exports."

Natural gas prices are up 93 percent on the year, trading near $5 per million metric British thermal units, after rallying with few stops since January due to weather extremities and underwhelming production.

Since last week, the rally has intensified as Hurricane Ida shut down more than 90 percent of gas production facilities on the US Gulf of Mexico prior to making its landfall. In the aftermath of the storm, some production remained shut and could take time to resume due to flooding and other carnage caused by the storm.

The EIA said that even before Ida made landfall at the end of last month, Henry Hub prices had gained as much as $1.77/mmBtu for August compared to a year ago.

"We expect that natural gas production in the GOM will gradually come back online during the first half of September," the agency added.