Natural gas prices, production, exports increased from 2016 to 2017, according to EIA
In 2017, natural gas spot prices at the national benchmark Henry Hub in Louisiana averaged $3.01 per million British thermal units (MMBtu), approximately 50 cents per MMBtu higher than in 2016, according to U.S. Energy Information Administration (EIA) data.
The higher 2017 prices contributed to decreased natural gas consumption for power generation. Increased exports of natural gas by pipeline and liquefied natural gas (LNG) cargoes offset increased domestic production, EIA said.
EIA also noted that natural gas prices at key regional trading hubs were less volatile overall in 2017 than in earlier years due to new pipelines that eased infrastructure constraints. Warmer weather for much of the year also helped to reduce price volatility. Record cold temperatures in the eastern United States at the end of December, however, caused substantial demand and price spikes at many trading locations.
Added takeaway capacity in the Appalachian region led to the continued narrowing of price differences between Henry Hub and nearby trading hubs such as Dominion South in western Pennsylvania, Transco Zone 6 NY in New York City and Algonquin Citygate near Boston, Massachusetts. The Appalachian region was the region with the highest natural gas production growth in the United States in 2017.
The relatively warm winter weather in 2017, with the exception of the end of December, led to reduced natural gas consumption growth in the residential and commercial sectors compared to 2016 levels. Increased natural gas prices contributed to a 6 percent year-on-year decline in natural gas consumption for power generation, according to EIA data through October and projections for November and December.
