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Why US Natural Gas Consumption Fell for the First Time in 5 Weeks

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US natural gas consumption 

PointLogic reported that US natural gas consumption fell by 3.7% between June 30, 2016, and July 6, 2016. This was the first fall in the last five weeks.

Gas deliveries to the power sector fell by 5% week-over-week, but they rose by 7.1% year-over-year. Gas flows to the residential and commercial sectors fell week-over-week and year-over-year. Gas consumption rose by 3.1% compared to the same week in 2015. Natural gas exports to Mexico were flat at 3.7 Bcf per day week-over-week, but they rose by almost 20% year-over-year.

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US natural gas consumption forecast  

In its June Short-Term Energy Outlook Report, the EIA (U.S. Energy Information Administration) estimated that US natural gas consumption could average 76.6 Bcf (billion cubic feet) per day in 2016 and 77.8 Bcf per day in 2017.

The electric power sector could drive demand in 2016. Power sector demand could fall in 2017 due to high natural gas prices. The industrial and residential segments could drive demand in 2017.

Increased demand should support natural gas prices. High natural gas prices support oil and gas exploration and production companies such as Cimarex Energy (XEC), Memorial Resources (MRD), Gulfport Energy (GPOR), and Kosmos Energy (KOS).

Volatility in oil and gas prices affects funds such as the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), and the PowerShares DWA Energy Momentum ETF (PXI).

In the next part of this series, we’ll take a look at the U.S. Commodity Futures Trading Commission’s Commitments of Traders report.

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