By MATT DAY
NEW YORK -- US natural
gas prices are expected to rise in the months ahead as
increased demand helps ease the current supply glut, the Energy
Information Administration said Tuesday in an updated outlook,
but the agency still cut its key price forecasts for the
heating and power-plant fuel.
In its May short-term energy outlook, the EIA trimmed its
price forecast for natural
gas sold at the benchmark Henry Hub in Louisiana to $2.45 a
million British thermal units, down 2.4% from the $2.51/MMBtu
forecast last month.
The EIA cut its 2013 price forecast by 7%, to
The EIA cut its forecast for natural gas prices at the
wellhead by 2%, to $2.40 a thousand cubic feet.
A glut of natural
gas in the US, caused primarily by the success drillers
have had in tapping deposits of gas trapped in shale rock deep
underground, pushed prices to a series of decade lows this
The growing surplus has raised concerns that the amount of
gas in storage could test the limits of US storage capacity
when supplies typically peak in the autumn.
In its latest outlook the EIA sees this as less likely,
nudging its October inventory forecast to 4.096 trillion cubic
feet, down from the 4.121 tcf projected last month.
The EIA''s most recent estimate of demonstrated peak gas
capacity, measured in April 2011, stood at 4.103 tcf.
The EIA increased its outlooks for both US gas
production and consumption slightly, to 65.84 billion cubic
feet a day and 70.17 billion cubic feet/day, respectively.
Both estimates were up about 1% from the agency''s April
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