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US Natural Gas Consumption Rose for the 7th Time in 8 Weeks

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Dec. 4 2020, Updated 10:53 a.m. ET

 Weekly US natural gas consumption 

Market intelligence company PointLogic reported that US natural gas consumption rose by 4.4% between July 21–July 27, 2016. Gas consumption rose for the seventh time in the last eight weeks.

Gas flows to the power sector rose by 9.2% week-over-week and by 16.2% YoY (year-over-year). To learn about what drives the power sector’s natural gas consumption, please read the first part of this series.

Gas deliveries to the industrial sector were flat week-over-week, but they rose by 0.5% YoY. Gas flows to the residential and commercial segment fell week-over-week and YoY.

US natural gas consumption is up by 8.8% over the corresponding period in 2015. Gas exports to Mexico were flat week-over-week, but they rose by ~15.2% YoY.

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US natural gas consumption forecast

The EIA (U.S. Energy Information Administration) estimated that US natural gas consumption could average ~76.5 Bcf (billion cubic feet) per day in 2016. It would slightly increase to ~77.7 Bcf per day in 2017. US natural gas consumption averaged ~75.3 Bcf per day in 2015.

The demand from the electric power sector could drive the demand for natural gas in 2016. The power sector demand could fall in 2017 due to high natural gas prices. Check out the last part of this series for a discussion on natural gas price forecasts. Demand from industrial and residential segments could drive demand for natural gas in 2017.

High demand should benefit natural gas prices. A rise in natural gas prices positively impacts the profitability of oil and gas producers like Cimarex Energy (XEC) and Kosmos Energy (KOS).

Uncertainty in oil and gas prices can impact funds such as the United States Natural Gas ETF (UNG), the Direxion Daily Natural Gas Related Bull 3X Shares ETF (GASL), 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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