US natural gas consumption
PointLogic reported that US natural gas consumption rose marginally for the second straight week for the week ending June 15, 2016—compared to the previous week. It rose by 1.8% week-over-week. Gas flows to the power sector increased for the same period. Gas deliveries to the residential and commercial sectors fell slightly for the same period. Meanwhile, natural gas consumption is 2.8% higher than the same period in 2015. Natural gas exports to Mexico also rose week-over-week and year-over-year.
US natural gas consumption forecast
The EIA (U.S. Energy Information Administration) estimates that US natural gas consumption could average 76.63 Bcf (billion cubic feet) per day in 2016 and 77.81 Bcf per day in 2017.
Demand from the electric power sector will drive demand in 2016. The industrial and residential segments will drive demand in 2017. New projects in the fertilizer and chemical sectors will also drive the demand. The rise in demand will benefit natural gas prices.
High natural gas prices support natural gas exploration and production companies like Breitburn Energy (BBEP), EXCO Resources (XCO), Cimarex (XEC), and Kosmos Energy (KOS). They also impact ETFs like the VelocityShares 3x Long Natural Gas ETN (UGAZ), the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), and the PowerShares DWA Energy Momentum Portfolio (PXI).
Read the next part of this series for the natural gas price forecast.