In the June Short-Term Energy Outlook (STEO), EIA forecasts that total working natural gas in underground storage in the Lower 48 states will reach a record level of 4,089 billion cubic feet (Bcf) by October 31, 2020. This forecast storage level would fill the Lower 48 states’ natural gas storage facilities to 87% of their design capacity of 4,693 Bcf and nearly 96% of their demonstrated peak capacity of 4,261 Bcf.
Following a relatively warm heating season (November 1–March 31), with the smallest total net withdrawals since 2015–16, the Lower 48 states’ working natural gas levels on March 31, 2020, were 19% higher than the five-year (2015–19) average and almost 74% higher than the working natural gas levels as of March 31, 2019. EIA estimates that total natural gas injections in the Lower 48 states from April 1 through the end of October this year will be about 2,080 Bcf, or 1% higher than the five-year average. Despite this near-average injection season, the high starting inventory levels lead to a record storage level by the end of October.
The June STEO forecasts that dry natural gas production in the 2020 injection season (April 1–October 31) will average about 88.9 Bcf/d, a decline of about 4% from the same time last year. Although a decrease from its November 2019 record high of 96.2 billion cubic feet per day (Bcf/d), total U.S. dry natural gas production has remained high by historical standards, resulting in high injection levels of natural gas into storage until recently. The expected decline in natural gas production will slow injection activity during the remainder of the refill season. This decline in natural gas production is primarily a result of low expected prices. EIA forecasts the benchmark Henry Hub price to remain lower than $2.00 per million British thermal units (MMBtu) through August 2020 and rise to $2.25/MMBtu in October 2020.
Overall, total consumption plus net exports of natural gas are expected to remain almost unchanged between the 2019 and 2020 injection seasons. The economic decline resulting from the response to the 2019 novel coronavirus disease (COVID-19) is expected to decrease industrial natural gas consumption in the 2020 injection season to about 19.1 Bcf/d, a decrease of almost 12% from 2019 levels; however, this decline is mostly offset by expected consumption increases in other sectors.
