Low Natural Gas Prices In US Will Persist Through 2024 – EIA

The US Energy Information Administration- EIA anticipates that the benchmark Henry Hub spot price will average around US$2.25 per million Btu in 2024, which is a 10% decrease from 2023 and also a 65% decrease from 2022.

In its March 2024 Short-Term Energy Outlook- STEO, EIA predicts that US natural gas inventories will happen to be more than 30% higher than average at the end of the winter season due to relatively low winter demand.

As per the EIA’s forecast, low natural gas prices are going to slightly decrease domestic natural gas production in 2024 as compared with record production in 2023.

The EIA Administrator, Joe DeCarolis, says that certain producers have announced curtailments within the production or reductions in the upstream spending on natural gas-directed activities in 2024, but due to so much domestic natural gas production which happens to be tied to growing crude oil production, one can expect natural gas production to dip far more slowly than the prices have.

EIA anticipates US crude oil production to continue elevating in 2024 and 2025, with both years exceeding the production record that was set in 2023. Growth in US crude oil production should assist in offsetting the effects of continued voluntary OPEC+ oil production slashes that have been announced in the week ending March 16. However, EIA still goes on to anticipate a tight balance when it comes to global oil production and demand, which will lead to higher Brent crude oil prices this year than anticipated at the beginning.

DeCarolis says that some significant sources of uncertainty go on to remain in their crude oil forecasts, such as how the Red Sea conflict could go ahead and affect production, along with how strictly OPEC+ members will go on to adhere to their voluntary production slashes.