This is according to the US Energy Information Administration in its short-term forecast for August, released on Wednesday this week.
EIA forecasts dry natural gas production will average 81.1bcf/d in 2018, up by 7.5bcf/d from 2017 and establishing a new record high. EIA expects natural gas production will rise again in 2019 to 84.1bcf/d.
EIA forecasts that pipeline exports of natural gas, which averaged 6.7bcf/d in 2017, will average 7.0bcf/d in 2018 and 8.5bcf/d in 2019. Increasing natural gas production in the US and the completion of new pipelines that carry US natural gas to demand centres in Mexico contribute to the expected increase.
In June, two new pipelines in Mexico were placed in service that will distribute natural gas from the US to destinations in Mexico.
In addition, EIA forecasts exports of LNG rise from 1.9bcf/d in 2017 to 3.0bcf/d in 2018 and to 5.1bcf/d in 2019. This growth contributes to US net exports of natural gas averaging 2.0bcf/d in 2018 and 5.4bcf/d in 2019, compared with 0.3bcf/d in 2017.
EIA expects Henry Hub natural gas spot prices to average $2.96/million British thermal units in 2018 and $3.10/MMBtu in 2019.
NYMEX futures and options contract values for November 2018 delivery that traded during the five-day period ending August 2, 2018, suggest a range of $2.33/MMBtu to $3.48/MMBtu encompasses the market expectation for November Henry Hub natural gas prices at the 95% confidence level.
On global liquid fluids, the EIA notes:
• Brent crude oil spot prices averaged $74 per barrel (b) in July, largely unchanged from the average in June. EIA expects Brent spot prices will average $72/b in 2018 and $71/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019. NYMEX WTI futures and options contract values for November 2018 delivery that traded during the five-day period ending August 2, 2018, suggest a range of $54/b to $84/b encompasses the market expectation for November WTI prices at the 95% confidence level.
• US regular gasoline retail prices averaged $2.85 gallon in July, down 4c/gal from the average in June. EIA expects that 2018 monthly average gasoline prices peaked in May and forecasts prices will remain relatively flat in the coming months, averaging $2.83/gal in September. EIA expects regular gasoline retail prices to average $2.76/gal in 2018 and in 2019.
• EIA estimates that US crude oil production averaged 10.8 million barrels per day in July, up 47,000b/d from June. EIA forecasts that US crude oil production will average 10.7 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 11.7 million b/d in 2019.
• EIA forecasts total global liquid fuels inventories to decrease by 0.3 million b/d in 2018 compared with 2017, followed by an increase of 0.3 million b/d in 2019. This outlook of relatively stable inventory levels over the forecast period contributes to a forecast of monthly average Brent crude oil prices remaining relatively stable between $70/b and $73/b, from August 2018 through the end of 2019.
