The Energy Information Administration (EIA) has raised its expected average 2021 Henry Hub natural gas spot price to $3.07/MMBtu, which would come in more than $1 above the $2.03 average recorded in 2020.

In the June edition of its Short-Term Energy Outlook issued Tuesday, the agency said it expects the average spot price at the national benchmark to average $2.92 for the third quarter. The $3.07 forecast for 2021 prices overall comes in slightly higher than the $3.05 average Henry Hub price EIA forecast a month ago. Henry Hub spot prices averaged $2.91 in May, up from $2.66 in April.

Growth in liquefied natural gas (LNG) exports and higher domestic consumption outside of the electric sector remain the driving factors behind stronger natural gas prices this year, according to the report.

“In 2022, we expect the Henry Hub price will average $2.93 amid slowing growth in LNG exports and rising U.S. natural gas production,” EIA said.

Domestic natural gas consumption is set to average 82.9 Bcf/d in 2021, 0.5% below 2020 levels due to price-driven gas-to-coal switching in the electric sector, researchers said. Residential/commercial consumption this year is projected to increase by 1.2 Bcf/d over 2020 levels, with industrial consumption to increase 0.7 Bcf/d year/year.

“Rising consumption outside of the power sector results from expanding economic activity and colder winter temperatures in 2021 compared with 2020,” EIA said. “We expect U.S. natural gas consumption will average 82.8 Bcf/d in 2022.”

U.S. natural gas inventories exited May at close to 2.4 Tcf, 3% below the five-year average, according to EIA estimates. The agency expects stockpiles to exit the 2021 injection season at 3.6 Tcf, or 4% below the five-year average.

Domestic dry natural gas production increased by 6.0 Bcf/d in March following weather-related disruptions in February, EIA said. Production is expected to average 92.9 Bcf/d in the second half of 2021 and then climb to 93.9 Bcf/d in 2022.

On the emissions front, U.S. energy-related carbon dioxide (CO2) emissions are forecast to increase by around 6% year/year in 2021 after falling 11% in 2020 amid the Covid-related reduction in economic activity, researchers said.

“We also expect energy-related CO2 emissions to rise in 2022, but by a slower rate of 2%,” EIA said. “We forecast that after declining by 19% in 2020, coal-related CO2 emissions will rise by 15% in 2021 and then decrease by 1% in 2022.”