US sees ‘relatively flat’ LNG export market in 2023 and decline in domestic natural gas use

Tuesday, 17 January 2023
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LNG News Editor: 

US Government forecasts in its latest short-term outlook that the LNG export market in 2023 will stay “relatively flat” before expanding in 2024 and expects a decline in domestic natural gas consumption.

The Henry Hub benchmark natural gas spot price is forecast to average slightly less than $5.00 per million British thermal units in 2023.

Down quarter

“This is lower by around 25 percent from last year as domestic consumption declines,” said the outlook from the Energy Information Administration.

“In 2024, we expect natural gas prices to again average slightly below $5.00 per MMBtu as dry natural gas production outpaces an increase in LNG exports that results from rising LNG export capacity,” the report stated.

“The EIA expects US natural gas prices to decrease, on average, through 2023 and 2024 as domestic production continues to grow,” explained EIA Administrator Joe DeCarolis.

“We also expect additional growth in US LNG exports as global demand remains strong and more US LNG export facilities come online in 2024,” he added.

“The natural gas market is particularly uncertain, but we expect that US natural gas production will establish new record highs in both 2023 and 2024, leading to lower domestic prices,” stated DeCarolis.

Natural gas production is expected to increase in key shale basins such as the Permian and the Haynesville.

“We expect natural gas production in both the Permian and Haynesville regions to grow with the completion of pipeline infrastructure expansions in 2023 and 2024,” the EIA explained.

The US agency’s forecast also expects the nation’s share of electricity generation from coal will fall from 20 percent in 2022 to 18 percent in 2023 and to 17 percent in 2024.

“This decline will be partially offset by an increase in the forecast share of combined utility-scale solar and wind generation from 16 percent in 2023 to 18 percent in 2024,” said the EIA outlook.

The US forecast on crude noted that “uncertainty over Russia’s oil supply” will persist, particularly in early 2023.

“We expect that global consumption of liquid fuels will increase from an average of 99.4 million barrels per day in 2022 to 102.2 million barrels per day in 2024.

“Ongoing concerns about global economic conditions as well as the easing Covid-19 restrictions in China, however, increase the uncertainty of the outcomes of our demand forecasts,” stated the EIA.

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