WASHINGTON — Natural gas working inventories (underground storage quantity) at the end of October are about the same as last year’s record-setting level, resulting in a decline in prices for the last two months, according to the latest U.S. Energy Information Administration (EIA) short-term energy outlook.
Mild weather, high production and the absence of significant hurricane activity in the Gulf of Mexico also contributed to the large inventory build.
The Henry Hub spot price averaged $3.45 per million Btu (MMBtu) in October, $0.43 per MMBtu lower than the average spot price in September. The projected Henry Hub prices rise to $4.22 per MMBtu in January because of the increase in winter space-heating demand.
EIA has lowered the average 2011 Henry Hub price forecast from last month’s outlook by $0.27 per MMBtu, to $4.31 per MMBtu, based on the upward revisions in the domestic production and inventory forecasts.
Commercial and residential natural gas consumption will remain flat in 2010 and rise slightly in 2011, EIA projects.
For propane users, residential prices are $2.447 per gallon (as of Nov. 1), up slightly ($.052) from last month. Wholesale propane prices are $1.290 per gallon, down slightly ($.037) from last month.
If you plan on spending a bit more time in your car this winter due to holiday-related endeavors, expect to pay about $2.84 for a gallon of regular-grade gasoline, 19 cents per gallon higher than last winter.
EIA projects average household expenditures for space-heating fuels will total $965 this winter, about the same as last year. EIA projects higher expenditures for heating oil and propane, but lower expenditures for natural gas and electricity. This forecast reflects higher prices for all the fuels, but milder weather than last winter in the South and Midwest contribute to lower fuel consumption in those areas.