Weekly US natural gas consumption
Market intelligence company PointLogic reported that US natural gas consumption rose 1% in the week ending June 29, 2016, from the previous week. Weekly US natural gas consumption rose for the fourth straight week. Gas flows to the power sector rose by 0.6% week-over-week and 8.6% year-over-year. Gas flows to the residential and commercial sectors rose slightly for the week ending June 29, 2016, from the previous week. Gas consumption is up 2% compared to the same week in 2015. Natural gas exports to Mexico were flat at 3.7 Bcf per day week-over-week. However, they rose by almost 20% year-over-year.
US natural gas consumption forecast
The EIA (U.S. Energy Information Administration) estimates 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.
Demand from the electric power sector would be the key driver in 2016. Power sector demand should fall in 2017 due to high natural gas prices. The industrial and residential segments should drive demand in 2017.
The rise in demand should support natural gas prices. High natural gas prices benefit oil and gas producers like Cimarex (XEC), Ultra Petroleum (UPL), Gulfport Energy (GPOR), and Kosmos Energy (KOS). The ups and downs in the oil and gas prices affect ETFs like the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), the Direxion Daily Natural Gas Related Bull 3X Shares ETF (GASL), and the PowerShares DWA Energy Momentum Portfolio (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.