(May 8 2012) Exclusive to GEOnomic Investing
According to the Energy Information Administration’s (EIA) latest short-term energy outlook, released today, we will not see $4.00 a gallon gas this summer, and the natural gas market seems to be turning around.
Regular gasoline retail prices will average $3.79 a gallon for the April-through-September summer driving season, down 16 cents from a previous forecast. The EIA also forecast gas prices will average $3.71 this year, and $3.67 in 2013.
At the same time, the EIA said it expects U.S. natural gas prices will rise in the coming months as increased demand helps erode the recent supply glut; however, the agency still cut its key price forecasts for natural gas. In its May short-term energy outlook, the EIA trimmed its price forecast for natural gas sold at the benchmark Henry Hub in Louisiana to $2.45 a million British thermal units, down 2.4% from the $2.51/MMBtu forecast last month. The EIA cut its 2013 price forecast by 7%, to $3.17/MMBtu. The EIA cut its forecast for natural gas prices at the wellhead by 2%, to $2.40 a thousand cubic feet.
In its latest outlook, the EIA adjusted its October inventory forecast to to 4.096 trillion cubic feet, below last month’s projection of 4.121 tcf. Thee EIA also increased its outlooks for both U.S. gas production and consumption slightly, to 65.84 billion cubic feet a day and 70.17 billion cubic feet a day, respectively. Both estimates were up about 1% from the agency’s April outlook.