EIA: US natgas production to reach record highs in 2026 while demand remains steady

The U.S. Energy 'Information 'Administration stated in its Tuesday Short-Term Energy Outlook that U.S. Natural Gas output will reach a?record high in 2026 while demand will remain steady.

EIA predicted dry gas production would rise from a new record of 107.6 billion cubic feet per day (bcfd) in 2025, to 110.0 bcfd by 2026, and 111.2 bcfd by 2027.

The agency projected that domestic gas consumption would remain at 91.6 billion cubic feet per day (bcfd) in 2026. This is the same as the record-high 91.6 Bcfd set in 2025. It will then ease to 91.5 Bcfd by?2027.

EIA forecasts from January were 108.8 Bcfd in production and 90.3 Bcfd in?demand.

GAS PRICES JUMP

EIA reported in a recent report that gas prices increased sharply in January. They averaged $7.72 for every million British thermal units. This was due to the cold weather, which?increased demand for heating, reduced production and caused record withdrawals from storage during a winterstorm.

EIA said that the storage withdrawal for the week ending on January 30 was the largest net storage withdrawal ever recorded in its weekly storage report.

EIA now "forecasts" that gas inventories will end the withdrawal season in late March with less than 1.9 trillion cubic feet. This is 8% lower than the previous estimates, causing the agency to forecast spot prices at the U.S. Henry Hub benchmark gas in Louisiana for February and march to be 40% higher.

Winter Storm Fern put pressure on the natural gas market in the short term. But we anticipate that higher prices will result in increased drilling in the near future, which in turn, will lead to a higher production in later this year, and help replenish storage, said EIA Administrator Tristan Abbey in a recent note.

This will ultimately result in lower gas prices than what we predicted next year. Our updated forecast predicts Henry Hub prices to average $4.30/MMBtu by 2026, and $4.40/MMBtu by 2027. This is 5% less than our January forecast.

The agency predicted that average U.S. exports of liquefied gas would increase to 16.4 billion cubic feet per day (bcfd) in 2026, and to 18.1 billion cubic feet per day in 2027. This is up from 15 billion cubic foot per days in 2025.

The EIA predicted that the U.S. coal production would fall from its two-year peak of 533,0 million short tonnes in 2025, to 519.5 millions tons in 2026, and to 500.8 million tones in 2027, which is the lowest level since 1963.

EIA predicted that carbon dioxide emissions would decrease from a high of 4.913 million metric tonnes in 2025, to a low of only 4.845 million metric pounds in 2026 as oil and coal consumption decreased, and then to a low of just 4.818 millions metric pounds in 2027, as gas and coal usage declined. (Reporting and Editing by Rod Nickel.)

(source: Reuters)