IHS: Natural Gas Prices Will Fall Below $2/MMBtu in 2020
The post IHS: Natural Gas Prices Will Fall Below $ 2/MMBtu in 2020 appeared first on POWER Magazine.
Average natural gas prices at Henry Hub in 2020 could fall to below $ 2/MMBtu —a level “not seen in decades”—owing to a persistent oversupply, a new report from information and analytics firm IHS Markit suggests.
Prices could fall despite strong demand for natural gas, both domestically, including for power generation, as well as for exports. Demand for gas has increased 14 billion cubic feet per day (Bcf/d) annually on average over the past two years, and the U.S. is expected to export an additional 3 Bcf/d of liquified natural gas (LNG) in 2020. IHS forecasts that nearly all growth in U.S. natural gas demand over the next few years will come from LNG exports to other countries.
Production, however, has grown by more than 14 Bcf/d since January 2018, and IHS Markit expects production will average more than 90 Bcf/d in 2019 and 2020.…