The U.S. Energy Information Administration has revised its forecast for U.S. natural gas production, the decline of which has been lessened for 2009 compared to the governmental agency's prediction last month. In June 2009, the EIA estimated that U.S. natural gas production would fall by 1.1% in 2009 and 2.6% in 2010.
According to its Short-Term Energy Outlook, the EIA now expects total U.S. marketed natural gas production to drop by 0.6% in 2009 and by 2.9% in 2010 as producers scale back on spending and reduce drilling activities. Citing Baker Hughes, the EIA reported that total working natural gas rigs are currently down 57% since September 2008.
Moreover, total natural gas consumption is expected to decline by 2.3% in 2009 amid the recession and remain flat in 2010, the EIA noted. Its previous forecast indicated a drop by 2.2% in 2009 and a slight increase in 2010.
Liquefied natural gas (LNG) imports to the U.S., however, are predicted to rise to 506 billion cubic feet in 2009 amid waning demand for gas in Japan and South Korea, which has increased the amount of available LNG in the global market, the EIA said.
Additionally, the EIA expects natural gas prices to recover in early 2010. Natural gas prices at the benchmark Henry Hub are expected to average $4.22 per Mcf 2009 and $5.93 per Mcf in 2010.
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