Natural Gas Outlook: Barring Weather 2006 Should Bring Easing in Prices

Total natural gas demand in 2006 is projected to remain near 2005 levels, then increase by 2.4 percent in 2007. Residential demand, in particular, is projected to fall by 1.8 percent from 2005 levels in 2006 and then increase by 4.3 percent in 2007. Because of the warm January and the assumed return to normal summer weather the demand for natural gas for generation of electricity is expected to fall by 4.4 percent in 2006, then increase by 1.3 percent in 2007. Recovery in natural gas-intensive industrial output following the 2005 hurricanes is expected to contribute to growth in industrial gas demand this year (4.3 percent) and in 2007 (1.5 percent).

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