The Energy Information Administration (EIA) on Tuesday narrowly reduced its estimated outlook for U.S. natural gas production in 2010, but the federal agency noted that total output still is tracking to be 1.9% higher than in 2009.

In its Short-Term Energy Outlook for August, EIA said marketed U.S. gas production should be up 1.12 Bcf/d (1.9%) to total 61.10 Bcf/d in 2010. In July EIA had predicted that domestic gas output would grow 2.1% to total 61.26 Bcf/d by year's end (see Daily GPI, July 8).

"Projected production declines gradually in 2011, falling by 0.8 Bcf/d (1.4%) as relatively low prices depress drilling activity," said the agency. Also, gas output shut in because of hurricanes in June and July was less than EIA had projected.

"The original forecast called for outages totaling 20 Bcf compared with actual outages from hurricanes Alex and Bonnie in June and July of 8 Bcf," said EIA. "Nevertheless, the next three months are typically the height of the hurricane season and additional outages are likely."

Based on the May hurricane forecast by the National Oceanic and Atmospheric Administration, EIA predicts shut-in production from August to October would total 146 Bcf. The offshore drilling moratorium also is projected to reduce Gulf of Mexico production by 10 Bcf over the last six months of 2010 and 92 Bcf during 2011.

Domestic natural gas consumption is up from a year ago, according to EIA. Gas demand now is expected to average around 64.89 Bcf/d in 2010. At that pace demand would be 3.8% higher than 2009 demand, which was 62.49 Bcf/d.

Projected Henry Hub spot prices are forecast to average $4.69/MMBtu in 2010, which is 74 cents higher than 2009's average and unchanged from EIA's July forecast. However, EIA now expects Henry Hub spot prices to average $4.98/MMBtu in 2011, which is 19 cents lower than it predicted in July. Tudor, Pickering, Holt & Co. on Tuesday cut its 2010 gas price forecasts through 2012 (see related story).

For the latest forecast period, EIA said annual average residential electricity prices increased only "modestly," averaging 11.6 cents/kWh in 2010, up slightly from 11.5 cents in 2009. In 2011 EIA expects electricity prices to average 11.8 cents/kWh.

Domestic carbon dioxide emissions from fossil fuels, which declined by 7% in 2009, are expected to increase by 3.4% in 2010 and 0.8% in 2011 because energy growth is spurring higher energy consumption, according to EIA. "However, even with these increases, projected emissions remain below their level in any year from 1999 through 2008."

EIA is reporting an uptick to its projected West Texas intermediate (WTI) crude oil price, which ended July at more than $78/bbl. The federal agency now expects WTI to average $81/bbl in 4Q2010 and $84/bbl in 2011, which is slightly above its July forecast.

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