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The Energy Information Administration on Tuesday cut its 2023 price forecast for U.S. natural gas and said it expects to see the lowest domestic first-quarter consumption of natural gas in five years.
The government agency estimates that about 99 billion cubic feet per day of natural gas will be consumed in the U.S. during the first quarter of this year. That would be the smallest amount for any first quarter since 2018 — down 5% from the first quarter of 2022, it said.
It attributed the decline in consumption to “very mild temperatures that have reduced demand for space heating,” with the largest decline seen in residential and commercial consumption, which it expects will be 11% less than in the first quarter of 2022, according to the EIA’s Short-term Energy Outlook report released Tuesday.
“A lot less natural gas was consumed in the U.S. residential and commercial sectors than we generally expect in January and February,” said EIA Administrator Joe DeCarolis, in a statement. “The warmer weather in most of the country means homes and business haven’t been running their heating systems as much as they normally do during those months.”
He pointed out that natural-gas consumption in California has “not been following the same trend as the rest of the country, as colder-than-normal weather in the state led to more natural-gas consumption.
The EIA said U.S. natural-gas prices will likely average $3.02 per million British thermal units this year, down 11.2% from the February forecast. For 2024, it reduced its forecast by 3.8% to $3.89.
For residential retail heating oil, including taxes, the government agency forecast an average price of $3.92 a gallon for this year, down 3.7% from the previous forecast, and for 2024, it cut its outlook by 0.2% to $3.61.
Global benchmark Brent oil prices, meanwhile, are expected to average $82.95 a gallon this year – down 0.8% from last month’s forecast, the EIA said. It also lowered its 2023 U.S. benchmark West Texas Intermediate oil-price forecast by 1% to $77.10 a gallon.
In Tuesday dealings, April natural-gas futures
NGJ23,
traded at $2.635 per million Btus, up 6.3 cents, or nearly 2.5%.
April WTI oil
CLJ23,
CL.1,
fell $2.55, or 3.2%, to $77.91 per barrel on the New York Mercantile Exchange, while May Brent oil
BRNK23,
BRN00,
lost $2.42, or 2.8%, to $83.76 a barrel on ICE Futures Europe.
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