Based on projections of flat natural gas demand, record production and unseasonably warm weather, natural gas prices this winter are expected to be flat compared with a year ago, when Henry Hub prices averaged $3.47/MMBtu, according to the Natural Gas Supply Association’s (NGSA) 13th Annual Winter Outlook.

“When all key supply and demand factors are combined, we expect neutral pressure on prices compared to last winter,” said NGSA Chairman Greg Vesey, who is Chevron Corp.’s vice president of Gas Supply and Trading. “However regions with infrastructure constraints are vulnerable to short periods of upward pressure on prices, as we’ve seen occasionally in the Northeast during severe cold weather in recent years,” he said Wednesday.

Other “wild card” market factors that could significantly affect NGSA’s Winter Outlook are unexpected cold — or warm — snaps; unforeseen decline in demand for oil and natural gas liquids, which would trigger a decline in associated gas from oil wells; higher-than-expected gas consumption by the power sector; and a U.S. debt ceiling crisis, if it materializes.

According to an independent analysis performed by Energy Ventures Analysis (EVA) that was commissioned by NGSA, associated gas produced from oil wells will take up any slack from a decreased number of completed gas wells this year.

Production is projected to be slightly higher this winter at 65.7 Bcf/d compared with 65.1 Bcf/d last winter, although well completions are expected to be only 6,400 this years compared to 8,900 in 2012. “High natural gas production despite fewer well completions can…be attributed to the significant amount of natural gas being produced from oil wells,” known as associated gas, EVA said. Associated gas is projected to account for 8% of U.S. supply this winter.

The overall demand level this winter (83.3 Bcf/d) will almost mirror last winter (83.1 Bcf/d) because of similar weather and economic conditions. Residential and commercial demand is expected to be flat to last winter, but demand from the electric sector is likely to fall 0.5 Bcf/d to 19.1 Bcf/d.

Although EVA projects the historic five-year trend of electric utilities dispatching natural gas-fired power plants rather than coal-fired plants to continue, it will be at a slightly lower level than last winter, the NGSA outlook noted.

Coal-to-gas switching is expected to continue for a sixth straight winter, but switching is forecast to average 4.2 Bcf/d rather than last winter’s near-record amounts.

However, gas demand from the industrial sector is expected to grow 3.5% year/year to 22 Bcf/d during the 2013-2014 heating season from 21.3 Bcf/d. EVA’s analysis points to sustained healthy growth in industrial demand over the remainder of the decade, as the petrochemical, fertilizer, steel and gas-to-liquids industries begin construction on scores of major gas-intensive projects.

In its recent Winter Fuel Outlook, the American Gas Association (AGA) projected that utility bills for residential delivered natural gas this winter would not increase by more than 5-10% compared with last winter because of various market forces (see related story). Despite the anticipated slight rise in gas utility bills, natural gas will remain the most affordable heating option for most residential customers this winter, the AGA said.