WASHINGTON (ICIS news)--US natural gas spot prices are expected to peak at $8.65/m Btu in January and likely will show an overall 9% increase to an average $7.86/m Btu for 2008 compared with this year, US energy officials said on Tuesday.
In its annual winter fuels forecast, the US Energy Information Administration (EIA) said that a mild hurricane season in the US Gulf so far this year and relatively high gas storage have helped bring the Henry Hub spot price for natgas down to an average $6.26/m Btu in September.
The US petrochemicals sector is heavily dependent on natural gas as a feedstock.
Henry Hub spot prices have declined in each of the four months since May, the administration noted.
The average Henry Hub spot price for this year is expected to be around $7.21/m Btu, according to the EIA, an independent energy data agency within the Department of Energy.
Administration director Guy Caruso told a press conference that US industrial consumption of natural gas - including that by chemical manufacturers - is expected to show a nearly 1% decline this year before reviving to a 0.4% gain in 2008.
Caruso said this year s anticipated decline in industrial gas consumption is apparently due to the residual effect of double hurricane hits along the US Gulf Coast in August and September 2005. Those two storms, Hurricanes Katrina and Rita, caused widespread damage to chemical and other manufacturing sectors concentrated along the coast.
He said that continuing recovery among some Gulf Coast manufacturing sectors will drive the 0.4% increase for industrial natgas consumption forecast for next year.
In part because of that resumption in industrial gas consumption, Caruso said the US will become increasingly dependent on imports of liquefied natural gas (LNG), which the administration predicts will show a 44.5% increase to 260bn cubic feet (bcf) by the end of this year and a 20% increase in 2008 to 170 bcf.
He said the two most significant factors affecting gas prices for the North American winter season of October through March are weather and uncertainties in global energy markets.
The administration predicts that the 2007-2008 US winter will be 4% colder than last season but 2% warmer than the 30-year average.
That anticipated increase in the number of cold days will drive increased demand for natgas as a residential heating fuel, Caruso said, citing home heating use as a major contributor to the expected increase in gas prices.
Nearly 60% of US households use natural gas for winter heating.
In its annual winter fuels forecast, the US Energy Information Administration (EIA) said that a mild hurricane season in the US Gulf so far this year and relatively high gas storage have helped bring the Henry Hub spot price for natgas down to an average $6.26/m Btu in September.
The US petrochemicals sector is heavily dependent on natural gas as a feedstock.
Henry Hub spot prices have declined in each of the four months since May, the administration noted.
The average Henry Hub spot price for this year is expected to be around $7.21/m Btu, according to the EIA, an independent energy data agency within the Department of Energy.
Administration director Guy Caruso told a press conference that US industrial consumption of natural gas - including that by chemical manufacturers - is expected to show a nearly 1% decline this year before reviving to a 0.4% gain in 2008.
Caruso said this year s anticipated decline in industrial gas consumption is apparently due to the residual effect of double hurricane hits along the US Gulf Coast in August and September 2005. Those two storms, Hurricanes Katrina and Rita, caused widespread damage to chemical and other manufacturing sectors concentrated along the coast.
He said that continuing recovery among some Gulf Coast manufacturing sectors will drive the 0.4% increase for industrial natgas consumption forecast for next year.
In part because of that resumption in industrial gas consumption, Caruso said the US will become increasingly dependent on imports of liquefied natural gas (LNG), which the administration predicts will show a 44.5% increase to 260bn cubic feet (bcf) by the end of this year and a 20% increase in 2008 to 170 bcf.
He said the two most significant factors affecting gas prices for the North American winter season of October through March are weather and uncertainties in global energy markets.
The administration predicts that the 2007-2008 US winter will be 4% colder than last season but 2% warmer than the 30-year average.
That anticipated increase in the number of cold days will drive increased demand for natgas as a residential heating fuel, Caruso said, citing home heating use as a major contributor to the expected increase in gas prices.
Nearly 60% of US households use natural gas for winter heating.
