US natural gas production will remain flat in 2020 as producers deal with low commodity prices by putting the brakes on drilling activity, according to the latest figures from the nation's Energy Department.

Gas output in the US surpassed 90 billion cubic feet per day for the first time in April of this year and grew to an estimated 95 Bcf per day in October, the department's Energy Information Administration said in its November Short-Term Energy Outlook. The growth represents an average 8 Bcf per day more than in the April to October period in 2018.

"However, EIA forecasts that monthly US natural gas production will remain nearly unchanged from the current level through 2020, averaging 95 Bcf per day for the year," according to the monthly report.

Prices at the US benchmark Henry Hub have plunged over the past few months amid a natural gas supply glut. In third-quarter earnings releases, natural gas players such as EQT announced plans to keep activity at "maintenance levels" in the coming months.

Henry Hub natural gas spot prices averaged $2.33 per million British thermal units in October, down 23 cents from the previous month. The decline was primarily driven by strong inventory injections, the EIA said.

While cold-weather forecasts across much of the US in early November caused the agency to lift its Henry Hub spot price expectations to an average $2.73 per million Btu for the final two months of 2019, the boost is not expected to last. The EIA forecasts Henry Hub spot prices to average $2.48 per million Btu in 2020, down 13 cents from the 2019 average.

"Lower forecast prices in 2020 reflect a decline in US natural gas demand and slowing US natural gas export growth, allowing inventories to remain higher than the five-year average during the year even as natural gas production growth is forecast to slow," according to the report.

Production

US expects flat 2020 natural gas output