The U.S. Energy Department boosted its outlook for 2012 natural
gas prices Tuesday and lowered its forecast for production.
Gas at the benchmark Henry Hub in Erath, La., will average $2.77 per million British thermal units, up from the previous estimate of $2.71, the Energy Department said in its monthly Short-Term Energy Outlook.
Marketed gas production will average 68.84 billion cubic feet a day this year, down from 68.85 billion estimated in October, according to the report from the department's Energy Information Administration. Output will climb 4 percent from last year.
"EIA expects some small declines in production in the coming months, related to recent drops in the rig count," the department said in the report.
Tuesday on the New York Mercantile Exchange, natural gas for December delivery rose 6 cents $3.62 per 1,000 cubic feet. The price has climbed about 20 percent this year.
Gas inventories are at a record and may have climbed to 3.935 trillion cubic feet at the end of October, the department said.
Production in the Gulf of Mexico will average 4.26 billion cubic feet a day, up from 4.22 billion estimated in October, according to the report. Lower-48-state output will be 63.65 billion, down from 63.69 billion.
The department's forecast for total gas consumption fell to 69.75 billion cubic feet a day from 69.76 billion last month.
LNG imports will average 460 million cubic feet a day this year, unchanged from October's forecast.
Demand for gas from power plants will average 25.37 billion cubic feet a day this year, up from the previous estimate of 25.36 billion. Industrial demand will average 18.54 billion, compared with 18.55 billion predicted last month.
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