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The U.S. Energy Information Administration lowered on Tuesday its 2023 natural gas Henry Hub price by 30.5%, according to its latest Short Term Energy Outlook (STEO).
The EIA now sees the 2023 natural gas price at Henry Hub at $3.40 per MMBtu, down from $4.90 per MMBtu in its previous forecast.
The Henry Hub natural gas price last year was $6.42 per MMBtu last year.
The EIA said it revised its outlook for Henry Hub prices “as a result of significantly warmer-than-normal weather in January that led to less-than-normal consumption of natural gas for space heating and pushed inventories above the five-year average,” the agency said in its STEO.
This lower than usual natural gas consumption in January saw inventories rise back above the five-year average. The EIA now sees inventories closing “the withdrawal season at the end of March at more than 1.8 trillion cubic feet, more than the five-year average.”
The EIA estimated that this year will see the smallest amount of global LNG export capacity additions since 2013.
On the oil side of things, the EIA revised its outlook on U.S. crude oil production for 2023 up to 12.5 million bpd, from its previous forecast of 12.4 million bpd. For comparison, U.S. crude oil production in 2022 averaged 11.9 million bpd, with 2021 U.S. crude oil production coming in at 11.25 million bpd.
The oil industry has been criticized for its slow ramp up of production after it plummeted due to the pandemic, with companies returning money to shareholders, undertaking large buyback schemes, and reducing debt instead of investing in increasing production.
The EIA’s Brent crude oil price forecast for this year is $83.63 per barrel.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.