Houston (Platts)--10Jun2015/502 pm EDT/2102 GMT

An increase this week in US power burn via natural gas has so far surpassed the expectations of Platts unit Bentek Energy, senior analyst Jeff Moore said Wednesday.

Utilities have consumed an average of 30.3 Bcf/day of natural gas this month, ahead of Bentek's forecast of an average of 29.5 Bcf/day. The increase in burn is "extremely strong," Moore said during the seventh annual Benposium in Houston.

He said it could lead to more natural gas generation during the summer, but warned there also could be a market response to the data, raising the price of natural gas, thereby creating a slide in utility consumption.

Bentek still sees natural gas burn for the year averaging about 23 Bcf/day, returning to a high last seen in 2012, when natural gas prices plummeted. Utility demand will increase about 2 Bcf/day from last year, with a similar year-on-year rise through 2020.

Year to date, natural gas generation is up 2.9 Bcf/day, and up 0.1 Bcf/day compared with 2012, Moore said. Season to date, natural gas generation is up 2.6 Bcf/day compared with 2014, but down 1.6 Bcf/day compared with 2012.

Last week's storage injection of 132 Bcf, the strongest injection on record, was "a huge thing," Moore said, and continued weekly injections above the five-year average in 2015 could strain infrastructure in the Southeast, where outflow of gas is limited. He stressed, however, that the idea of storage approaching US capacity of about 4.2 Tcf this year is unlikely given where storage capacity is located throughout the country.

Storage levels were at 3.6 Tcf at the end of last year, below the five-year average of 3.8 Tcf.

Moore said high storage numbers and continued production growth, particularly in the Northeast, will cause near-term natural gas prices to fall below a $2.50/MMBtu/month average at times this year, and 2015 will end with an average price of $2.70/MMBtu.

Bentek predicts prices will remain relatively flat in 2016, with an average of $2.74/MMBtu, before significant increases the next four years to $3.32/MMBtu, $3.81/MMBtu, $4.34/MMBtu and $4.48/MMBtu, respectively.

--Jim Levesque, jim.levesque@platts.com 
--Edited by Annie Siebert, ann.siebert@platts.com

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