The U.S. boosted estimates for natural gas production this year and in 2013 on increased output from shale reserves.
Marketed gas output will average 67.64 billion cubic feet a day this year, up from 66.15 billion last year, the Energy Department said in its monthly Short-Term Energy Outlook, released today in Washington. The department had pegged 2012 output at 67.34 billion in its January report.
Production in 2013 was estimated at 68.52 billion cubic feet a day, up from 68.04 billion estimated last month.
Gas at the benchmark Henry Hub in Erath, Louisiana, will average $3.35 per million British thermal units this year, down from the previous estimate of $3.53, according to the report from the department’s Energy Information Administration.
U.S. gas output grew at a record 4.8 billion cubic feet a day last year, “driven in large part by increases in shale gas production,” the department said in the report. Gains in 2012 and 2013 will “occur at a much lower rate than in 2011 as low prices reduce new drilling plans.”
U.S. stockpiles may end the winter heating season on March 31 at more than 2 trillion cubic feet and set records at the end of October 2012 and 2013, the report showed. The agency estimates inventories will peak at 3.983 trillion cubic feet in October and 4 trillion a year later.
“Working natural gas inventories continue to set new seasonal record highs as the unusually warm winter has contributed to much lower-than-normal inventory draws,” according to the EIA, Energy Department’s the statistical arm.
Natural gas for February delivery fell 8.7 cents, or 3.4 percent, to $2.463 per million Btu at 1:14 p.m. on the New York Mercantile Exchange. Gas is down 18 percent this year and dipped to a 10-year low of $2.231 on Jan. 23.
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