Source: U.S. Energy Information Administration, based on Refinitiv
In 2019, natural gas spot prices at the national benchmark Henry Hub in Louisiana averaged $2.57 per million British thermal units (MMBtu), about 60 cents per MMBtu lower than in 2018 and the lowest annual average price since 2016. Lower natural gas prices in 2019 supported higher consumption—particularly in the electric generation sector—and higher natural gas exports. Continued growth in domestic production of natural gas also supported lower natural gas prices throughout the year.
Monthly average natural gas prices at most key regional trading hubs in 2019 reached their highest levels in February, and they were relatively low and stable from April through December. In the Northeast, additional imports of liquefied natural gas (LNG) into New England limited price spikes during the winter of 2018–19. Despite a cold snap in the Midwest in February 2019, natural gas prices at Chicago Citygate were lower than during previous extreme weather events.
However, in the Pacific Northwest, unseasonably cold weather at the end of winter coupled with regional supply constraints and decreased storage inventories led to significant price spikes at the Northwest Sumas hub in March. Additional pipeline takeaway capacity in the Permian region eased some infrastructure constraints and increased regional prices at the Waha hub in western Texas after six consecutive months of prices lower than $1/MMBtu (March through August).
Source: U.S. Energy Information Administration, based on Natural Gas Intelligence
Natural gas consumption in the residential and commercial sectors increased by 2% in 2019 compared with 2018, based on the U.S. Energy Information Administration’s (EIA) monthly data through October and estimates for November and December. Natural gas use in the electric generation sector also increased in 2019, particularly in July and August when a heat wave in the Midwest and the Northeast led to record-high generation by natural gas-fired power plants.
Lower summer natural gas prices, which averaged $2.33/MMBtu in June through August (the lowest summer average Henry Hub natural gas price since 1998), have supported higher natural gas-fired generation in the summer months.
Dry natural gas production has grown every year since 2016. Production increased by 7.5 billion cubic feet per day (Bcf/d) (9%) through the first 10 months of the year after record growth in 2018. Sustained growth in natural gas production put downward pressure on prices, which continued to decline for most of 2019....MORE
