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US Natural Gas Futures: What to Expect This Spring

PART:
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Part 7
US Natural Gas Futures: What to Expect This Spring PART 7 OF 8

Weekly US Natural Gas Consumption Fell Again

Weekly US natural gas consumption  

PointLogic reported that US natural gas consumption fell 6% on April 13–19, 2017. Consumption fell 10.9% from the same period in 2016. Consumption fell for the second consecutive week. The fall in natural gas consumption is bearish for natural gas (DGAZ) (UGAZ) (BOIL) prices. A fall in industrial, residential, and commercial consumption of natural gas on April 13–19, 2017, led to the fall in consumption for the same period. For more on what drives consumption, read Part 2 of this series.

Weekly US Natural Gas Consumption Fell Again

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Gas exports to Mexico  

Natural gas exports to Mexico fell 23.7% to 2.9 Bcf (billion cubic feet) per day on April 13–19, 2017—14.7% lower than the same period in 2016. On January 25, 2017, President Trump signed an order to build a wall between the US and Mexico to curb illegal immigration. It could hamper natural gas exports. It could also curb supplies to Mexico and pressure natural gas prices in the US. 

US natural gas consumption estimates  

The EIA (U.S. Energy Information Administration) estimates that US natural gas consumption will average 73.3 Bcf per day and 76.1 Bcf per day in 2017 and 2018, respectively. US natural gas consumption averaged 75.1 Bcf per day in 2016 and 74.7 Bcf per day in 2015. For updates on natural gas production, read the previous part of this series.

Impact of slowing consumption  

The fall in consumption in 2017 could also pressure natural gas prices. Lower natural gas prices could have a negative impact on oil and gas producers’ earnings such as WPX Energy (WPX), Gulfport Energy (GPOR), and Antero Resources (AR).

In the final part of this series, we’ll look at some natural gas price forecasts.

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