Winter Natgas Prices Will Be Up From Recent Years

63

Even if domestic gas production grows faster than domestic demand, “forecasts anticipate that continued growth in net exports, including from liquefied natural gas (LNG) export facilities, will place additional pressure on natural gas prices this winter,” the agency said, reports Energy World.

Natural gas prices

Natural gas prices at major US trading hubs for the upcoming winter are expected to remain higher than in recent years, the Federal Energy Regulatory Commission (FERC) said on Thursday.

Even if domestic gas production grows faster than domestic demand, “forecasts anticipate that continued growth in net exports, including from liquefied natural gas (LNG) export facilities, will place additional pressure on natural gas prices this winter,” the agency said.

Freeport LNG, the second-largest US LNG export plant, idled for five months by a fire, must receive full approvals before a planned November restart can begin, regulators said this week.

In its annual summer assessment, the FERC said it sees the Henry Hub natural gas futures contract price averaging $6.82 per million British Thermal Units (MMBtu) for winter 2022-2023, up 30 per cent from last winter’s settled price.

US natgas futures are currently trading just under $5.3 per mmBtu, their lowest levels in about seven months.

This year, most additions to generation capacity will come from solar and wind, while most retirements will come from coal, the commission said.

“In total, the US will add 43 gigawatts(GW)of net winter capacity between March 2022 and February 2023, mostly from solar and wind generation.”

However, several regions may experience coal supply and transportation constraints this winter because of ongoing rail service issues, it said, with natgas supply expected to remain constrained in New England, leading to higher gas and electricity prices.

“Natural gas pipelines in California may also face constraints this winter due to ongoing pipeline outages.”

Natural gas storage withdrawals for the 2022-2023 withdrawal season are expected to fall 11.1 per cent below the previous year’s levels, the agency forecasted, and predicted a 24.3 per cent increase in net natural gas exports.

The FERC warned that this winter, international markets will likely also affect the US market, as they did at times last winter.

Did you subscribe to our daily Newsletter?

It’s Free! Click here to Subscribe

Source: Energy World

LEAVE A REPLY

This site uses Akismet to reduce spam. Learn how your comment data is processed.