EIA reports 2019 natural gas prices were lowest in three years

In 2019, Natural gas spot prices at the national benchmark Henry Hub in Louisiana reached the lowest annual average price since 2016, according to the U.S. Energy Information Administration.

The prices averaged $2.57 per million British thermal units (MMBtu), approximately 60 cents per MMBtu lower than in 2018.

The lower natural gas prices of 2019 supported higher consumption, especially in the electric generation sector, and higher natural gas exports, the EIA said. The continued growth of domestic production of natural gas supported lower natural gas prices.

Consumption of natural gas in the residential and commercial sectors increased by two percent in 2019 as compared to 2018, based on the EIA’s monthly data through October and estimates for November and December.

The use of natural gas also increased in the electric generation sector in 2019, particularly during the heat waves that hit the Midwest and Northeast in July and August, leading to record-high generation by natural gas-fired power plants.

Dry natural gas production increased by nine percent, or 7.5 billion cubic feet per day (Bcf/d), during the first 10 months of the year, following record growth in 2018.

At the end of the withdrawal season at the end of March, natural gas storage inventories were at their lowest levels since 2014. However, the injection season ended with the second-highest net injection volume since 2014.

U.S. natural gas exports by pipeline to Mexico averaged 5.1 Bcf/d during the first 10 months of 2019, 0.4 Bcf/d more than the average from 2018. U.S. LNG exports reached a new record in 2019, averaging an estimated 5.0 Bcf/d, 69 percent more than in 2018.