Growing domestic production over the past several years has displaced some pipeline imports from Canada, while exports to Mexico have increased. EIA expects these trends will continue through 2015. EIA projects net imports of 3.6 Bcf/d in 2014 and 2.6 Bcf/d in 2015, which would be the lowest level since 1987. Over the longer term, the EIA Annual Energy Outlook 2014 projects the United States will be a net exporter of natural gas beginning in 2018.
U.S. Natural Gas Inventories
Natural gas working inventories fell by 152 Bcf to 1,196 Bcf during the week ending February 28, 2014. Colder-than-normal temperatures during the month resulted in increased heating demand, prompting larger-than-normal withdrawals. Stocks are now 908 Bcf less than last year at this time and 758 Bcf less than the five-year (2009-13) average for this time of year. Total stocks, as well as stocks in all three regions, are currently less than their five-year (2009-13) minimums.
U.S. Natural Gas Prices
Natural gas spot prices averaged $6.00/MMBtu at the Henry Hub in February, up $1.29/MMBtu from January, the result of bitterly cold weather during the month. At the end of February, both spot and futures prices declined rapidly, falling below $5/MMBtu. EIA projects that the March spot price will average $4.48/MMBtu, and will continue to decline in the spring. Projected Henry Hub natural gas prices average $4.44/MMBtu in 2014 and $4.14/MMBtu in 2015.
Natural gas futures prices for June 2014 delivery (for the five-day period ending March 6, 2014) averaged $4.55/MMBtu. Current options and futures prices imply that market participants place the lower and upper bounds for the 95% confidence interval for June 2014 contracts at $3.51/MMBtu and $5.90/MMBtu, respectively. At this time last year, the natural gas futures contract for June 2013 averaged $3.61/MMBtu and the corresponding lower and upper limits of the 95% confidence interval were $2.79/MMBtu and $4.67/MMBtu.