US natural gas consumption
Weekly US natural gas consumption fell by 12% between April 13, 2016, and April 20, 2016. Likewise, natural gas flows to the industrial sector fell by 4% for the same period. In contrast, gas deliveries to the power sector rose by 2.1%. Pipeline exports of natural gas to Mexico rose. Natural gas deliveries to residential and commercial segments fell for the same period. For the week, consumption declined due to mild spring weather. Read more about natural gas production in Part 4 of this series.
US natural gas consumption forecast
The EIA (U.S. Energy Information Administration) released its Short-Term Energy Outlook report on April 12, 2016. It forecast that US natural gas consumption could average 76.2 Bcf (billion cubic feet) per day in 2016. It could rise more to 77.4 Bcf per day in 2017. The rise in consumption would be driven by the electric power sector in 2016. In this sector, natural gas consumption is estimated to rise by 3.9% in 2016. Then, it could fall by 1.3% in 2017 due to the rise in natural gas prices. To learn more about the natural gas price forecast, read the next part of the series. The estimates of a rise in demand from the industrial sector would also benefit natural gas consumption in 2017. New projects coming online in the fertilizer and chemical sectors will also drive the demand.
The roller coaster ride in natural gas prices impacts oil and gas producers like EV Energy (EVEP), Breitburn Energy (BBEP), Kosmos Energy (KOS), Range Resources (RRC), and QEP Resources (QEP). It also influences ETFs like the VelocityShares 3x Long Natural Gas ETN (UGAZ), the PowerShares DWA Energy Momentum Portfolio (PXI), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), and the Fidelity MSCI Energy ETF (FENY).