(Adds storage and price forecasts)
Aug 12 The U.S. Energy Information
Administration on Tuesday raised its estimate for U.S. natural
gas production in 2014 to 5.3 percent over 2013's record high
In its August Short-Term Energy Outlook (STEO), the EIA said
it expects marketed natural gas production in 2014 to rise 3.71
billion cubic feet per day (bcfd) from 2013 to 73.89 bcfd, up a
bit from last month's forecast increase.
That would be the fourth straight annual record as strong
increases in Texas and the Marcellus states offset declines in
the Gulf of Mexico, EIA said, noting production in 2015 is
expected to grow by 2.1 percent over 2014.
EIA also forecast gas consumption in 2014 will rise 1.24
bcfd, or 1.7 percent, from 2013 to 72.57 bcfd, up a bit from
last month's forecast increase. Consumption gains were led by
the industrial sector, EIA said.
EIA projected working gas inventories will reach 3.46
trillion cubic feet (tcf) at the end of October, up from its
3.43 tcf forecast in July. That is still 0.35 tcf below the
level at the end of the injection season last year.
EIA reduced its forecast for gas prices at the Henry Hub,
the benchmark supply point in Louisiana, to an average of $4.46
per million British thermal units in 2014 and $4 in 2015, 31
cents and 51 cents lower than last month's STEO, respectively.
In 2013, Henry Hub prices averaged $3.73.
Growing domestic production is expected to continue to put
downward pressure on gas imports from Canada, and increase
exports to Mexico, EIA said, projecting net imports will decline
to 3.3 bcfd in 2014 and to 2.6 bcfd in 2015.
On the coal front, EIA said coal inventories at power plants
fell to 118 million short tons (MMst) in March, the lowest level
since 2006, because of the increase in coal-fired generation as
gas prices rose, cold weather boosting electric demand, and rail
congestion over the winter slowing coal deliveries.
Stocks increased to 136 MMst at the end of May, but were
still 40 MMst lower compared with the same time last year, EIA
Midwestern coal inventories are down about 10 MMst from last
year, posing problems for some generators in Wisconsin and
Minnesota, EIA said noting ongoing coal delivery problems have
the "potential to hinder or even lead to the curtailment of some
EIA said coal used for power generation will rise to 40.4
percent in 2014 from 39.1 percent in 2013 due to stronger gas
prices, before falling to 39.0 percent in 2015, when numerous
coal plants retire due to implementation of the federal Mercury
and Air Toxics Standards (MATS).
Gas for power generation, meanwhile, will fall to 26.5
percent in 2014 from 27.4 percent in 2013, before rising to 27.5
percent in 2015, EIA said.
(Reporting by Scott DiSavino; Editing by Jonathan Oatis and