US natural gas prices will rise to between $4 and $5/MMBtu this winter if, as expected, the country sees a return to normal temperatures, consultant ICF said Wednesday.
At a winter fuels conference in Washington, ICF Vice President Bruce Henning said his company is forecasting an average US heating loads of 36.6 Bcf/d this winter, up from 30.3 Bcf last year, when much of the US experienced a mild winter.
But ICF projected that natural gas used for power generation this winter will be 4.2 Bcf/d below last year because of lower fuel switching from coal to gas. "Gas becomes less competitive at the price between $2.50 and $3.50[/MMBtu]," Henning said.
Henning also said ICF believes gas prices will be supported by a continued modest economic recovery, which will lead to a slight increase in industrial gas consumption. The company expects industrial gas demand this winter to average 20.5 Bcf/d, up from 19.6 Bcf/d last winter and 19 Bcf/d in the winter of 2010-11.
Natural gas production is likely to continue to grow very slightly, despite lower gas prices, ICF said, projecting that it will average 65.6 Bcf/d during this year's storage withdrawal season, compared with 65.5 Bcf/d last year.
In addition, ICF said New England might see some natural gas price spikes this winter because "pipelines may not be able to serve all of the electric generation load requesting interruptible service," Henning said.
Also on Wednesday, the US The US Energy Information Administration predicted a 15% increase in home gas heating bills because of expected cooler weather this winter (See story, 1422 GMT).
"EIA expects households heating with natural gas to spend an average of $89 (15%) more this winter than last winter," it said.
The agency raised its fourth-quarter gas price outlook by 22 cents to $3.22/MMBtu and boosted its Q1 estimate by 6 cents to $3.33/MMBtu.
