EIA now expects U.S. pure fuel costs to common above $6.00/MMBtu this winter

In our November Quick-Time period Vitality Outlook (STEO), we forecast that pure fuel spot costs on the U.S. benchmark Henry Hub will common $6.09 per million British thermal items (MMBtu) this winter (November 2022–March 2023), the best actual value since winter 2009–10.

Our forecast displays pure fuel storage ranges which can be 4% under common heading into winter withdrawal season and extra demand for liquefied pure fuel (LNG) because the Freeport LNG facility comes again on-line. After the winter, we anticipate the Henry Hub value to say no in 2023 as manufacturing development outpaces each home consumption and LNG exports.

Henry Hub pure fuel spot costs reached a peak of $8.80/MMBtu in August. Costs declined to common $5.66/MMBtu in October following a interval of sturdy dry pure fuel manufacturing and a number of other consecutive weeks of comparatively giant injections into pure fuel storage. All through September and October, excessive volumes of pure fuel injections into underground storage decreased the storage deficit to the five-year (2017–21) common from 11% on the finish of August to 4% as of October 28.

Regardless of decrease Henry Hub spot costs since August, we anticipate pure fuel costs to rise this winter on account of seasonal demand for pure fuel in house heating, which usually peaks in January and February. We anticipate that larger demand for LNG exports—significantly within the Northern Hemisphere—may even improve pure fuel costs. We anticipate demand for pure fuel at LNG export amenities to extend when the Freeport LNG terminal in Texas resumes partial operations in November, after it paused operations in June following a hearth.

U.S. dry pure fuel manufacturing has been growing all through 2022 and has averaged greater than 98 billion cubic ft per day (Bcf/d) each month since June. We anticipate dry pure fuel manufacturing to proceed to develop, averaging 99.4 Bcf/d this winter and 99.7 Bcf/d in 2023. We forecast pure fuel costs on the Henry Hub will start to say no within the spring of 2023 as manufacturing development continues and winter demand for heating subsides. For 2023, we forecast the annual Henry Hub value to common $5.46/MMBtu for the yr.