High export demand for LNG and higher domestic natural gas consumption pushed U.S. gas demand to higher levels than supply last year
Yet, U.S. natural gas prices have dipped in recent months due to warmer than usual winter weather which required lower volumes of withdrawals from storage. As a result, working natural gas stocks in storage is around 24% more than the five-year average, and 36% more than last year at this time. This puts downward pressure on, which saw two consecutive cuts in price forecasts in two months from the U.S. Energy Information Administration .
“The approval and expansion of multiple LNG export facilities in 2022 increased LNG liquefaction capacity to serve the growing international LNG demand to higher-priced regions.” The surge in exports to Europe meant that U.S. LNG exports to Asia declined as China and other importers of U.S. LNG scaled down buying due to the Chinese zero-Covid policy last year and the high prices which South Asian importers couldn’t afford. The overall increase in U.S. LNG exports, combined with higher domestic gas demand, sent U.S. benchmark prices to multi-year highs last year.
This year, Henry Hub prices have dropped due to milder winter weather in January and February in many parts of the United States. Natural gas inventories rose to above the five-year average, weighing down on prices. for natural gas prices for this year and next. The EIA now sees prices averaging $3.02 per MMBtu this year, down by 11.2% from its previous forecast of $3.40 per MMBtu. The EIA has also lowered its forecast for natural gas prices for next year to $3.
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