EIA 2009 Natural Gas Forecast

Adds details on gas consumption, production, price estimates)

NEW YORK, Feb 10 (Reuters) - The U.S. Energy Information Administration on Tuesday again cut its estimate of domestic natural gas production growth in 2009 and further increased the expected decline in demand as economic activity continues to slow.

In its February Short-Term Energy Outlook, EIA forecast U.S. marketed natural gas output this year would rise 0.13 billion cubic feet per day to 58.73 bcf daily, up 0.2 percent from last year but down slightly from a 0.7 percent gain forecast in its previous monthly report.

In 2010, EIA said total U.S. marketed natural gas production was expected to decline 1.1 percent, as producers continue to slow development due to lower gas prices.

EIA said some production curtailments may be necessary later in 2009 to balance an oversupplied market.

EIA also projected domestic gas consumption this year would fall 0.85 bcf per day, or 1.3 percent, to 62.70 bcf per day, more than the 1 percent drop forecast last month.

EIA said expectations for weather-driven consumption growth in the residential and commercial sectors this year were outweighed by the implications of continued economic weakness in the industrial and electric power sectors.

Demand from the industrial sector alone was projected to fall 5.1 percent this year, up from last month's estimate of a 3 percent decline.

EIA expects consumption next year to grow slightly by 0.6 percent, primarily due to gains from the electric power sector, but that estimate too was down from the 0.7 percent gain forecast in its previous short-term outlook.