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The U.S. Energy Information Administration (EIA) forecasts a slight decline in natural gas production in 2024 to 103.4 billion cubic feet per day (bcfd), down from a record 103.8 bcfd in 2023. This would mark the first production drop since 2020, as lower prices have led producers to reduce drilling activities. Despite this, domestic demand is projected to rise to a record 89.9 bcfd, driven by increased consumption. Liquefied natural gas (LNG) exports are also set to grow to 12.1 bcfd in 2024, tightening supply. Coal production is expected to fall, while carbon emissions may increase due to higher natural gas and petroleum use.

Key Highlights

# U.S. natural gas production is set to decline in 2024 after reaching a record high in 2023.

# Demand for natural gas will rise to an all-time high in 2024, driven by increased domestic use.

# EIA projects LNG exports to rise, though slightly below earlier forecasts.

# Appalachian shale gas production is expected to dip, further contributing to reduced output.

# Coal production will fall as natural gas and renewables replace coal-fired power plants.

The U.S. Energy Information Administration (EIA) has projected a notable shift in the natural gas market for 2024. After hitting a record production high of 103.8 billion cubic feet per day (bcfd) in 2023, dry gas output is expected to dip slightly to 103.4 bcfd in 2024. This marks the first production decline since 2020. The drop is largely attributed to reduced drilling activities following historically low Henry Hub spot prices earlier in the year. Despite the output decline, demand is forecasted to climb to a new record of 89.9 bcfd, up from 89.1 bcfd in 2023, driven by rising domestic consumption.

Supporting the rise in natural gas demand, U.S. liquefied natural gas (LNG) exports are expected to reach 12.1 bcfd in 2024, further tightening supply. Appalachian shale gas, the largest U.S. basin, is also expected to see a slight reduction in wet gas production from 35.4 bcfd to 35.3 bcfd in September, impacting overall market supply.

Other relevant news includes EIA’s projection that U.S. coal production will fall significantly in 2024 to 501 million short tons, the lowest level since 1963, as gas and renewables replace coal-fired power generation. This trend is part of a broader shift toward cleaner energy sources, though it also signals a rise in carbon emissions from gas and petroleum use.

Finally

With demand rising and output slipping, U.S. natural gas prices may face upward pressure in 2024, influenced by supply constraints and increasing LNG exports.

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