The U.S. raised its forecast for natural gas output in 2013 by 0.3% and lowered its outlook for prices.
Marketed gas production will average a record 70.02 billion cubic feet a day this year, up from 69.84 billion estimated in January, the Energy Information Administration said in its monthly Short-Term Energy Outlook, released today in Washington.
Gas prices at the benchmark Henry Hub in Erath, Louisiana, will average $3.53 per million British thermal units, down from the previous estimate of $3.74, according to the report from the EIA, the Energy Department’s statistical arm.
“Production in the Marcellus Shale areas of Pennsylvania and West Virginia is expected to continue rising as recently drilled wells become operational” the EIA said in the report.
Production in the Gulf of Mexico will average 4.3 billion cubic feet a day, up from 4.27 billion estimated in January. Lower-48-state output will be 64.79 billion, up from 64.67 billion in last month’s report.
The forecast for total gas consumption rose to 70.31 billion cubic feet a day from 69.67 billion.
LNG imports will average 450 million cubic feet a day this year, unchanged from the January forecast.
Demand for gas from power plants will average 23.15 billion cubic feet a day this year, up from the previous estimate of 22.87 billion. Industrial demand will average 19.41 billion, up 3.6% from 18.73 billion predicted last month. The agency revised industrial consumption data going back to 2010 to reflect a stronger recovery.
Natural gas for March delivery fell 2.3 cents, or 0.7%, to $3.256 per million Btu at 12:36 p.m. on the New York Mercantile Exchange. Prices have declined 2.8% this year.
Gas inventories may total 2.0 trillion cubic feet at the end of March, down from 2.477 trillion at the same time last year, according to the report.