By Sarah Jacob
NEW YORK--The U.S. Energy Information Administration lowered its outlook for natural-gas prices slightly this year, amid predictions of lingering mild weather in the summer months.
The 2013 spot prices at the Henry Hub delivery point are expected to average $3.71 a million British thermal units, the EIA said in its monthly Short Term Energy Outlook on Tuesday. It is lower than the $3.76/MMBtu forecast in July. But the agency marginally lifted its 2014 forecast to $3.95 a MMBtu, from $3.91 expected in July.
Natural-gas futures have fallen sharply to a five-month low in recent weeks as weather forecasts called for cooler-than-normal temperatures across heavily populated regions such as the Midwest and Northeast for much of August. This has tempered expectations for gas-fired cooling demand, resulting in an increase in natural gas in storage.
On April 1, domestic natural-gas working inventories were 750 billion cubic feet, or 30%, less than the same time last year, the EIA said. That gap from last year's levels has been steadily reducing to 370 bcf at the end of July.
The agency said it expects gas stockpiles to peak this year at 3.8 trillion cubic feet at the end of October. That is about 130 bcf less than the peak inventory level last year.
The agency's projections for domestic gas supply and demand were slightly lower from July. Dry natural-gas production in 2013 was expected at 66.33 billion cubic feet a day. Consumption was forecast at 69.93 billion cubic feet a day.
Write to Sarah Jacob at [email protected]