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Decoding US Natural Gas Consumption and Its Impact on Prices

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Weekly US natural gas consumption 

PointLogic reported that US natural gas consumption rose 11% from December 15–21, 2016, and 25.4% compared to the same period in 2015. The rise in consumption is bullish for natural gas (FCG) (BOIL) (DGAZ) (UNG) prices. 

Read Mild Weather Impacts Inventory Data and Natural Gas Prices and US Natural Gas Prices Fell from 2016 High: What’s Next? for more on natural gas prices.

Higher natural gas prices can have a positive impact on oil and gas producers’ profitability such as Southwestern Energy (SWN), Cimarex Energy (XEC), and Kosmos Energy (KOS).

Natural gas flows to the power sector rose week-over-week and YoY (year-over-year). Gas flows to the residential and commercial segments rose week-over-week and YoY. Natural gas deliveries to the industrial sector rose week-over-week and YoY as well.

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US natural gas consumption estimates  

The U.S. Energy Information Administration forecasts that US natural gas consumption could average 75.2 Bcf (billion cubic feet) per day in 2016 and 76 Bcf per day in 2017. US natural gas consumption averaged 74.7 Bcf per day in 2015. For updates on natural gas production, read the previous part of this series. For details on monthly natural gas consumption and exports, read How US Natural Gas Consumption Impacts Natural Gas Prices. 

Impact of rising demand 

Rising demand should support natural gas prices. High natural gas prices can have a positive impact on oil and gas producers’ earnings such as Cimarex Energy, Southwestern Energy, and Kosmos Energy.

Moves in crude oil and natural gas prices impact funds such as the Direxion Daily Natural Gas Related Bull 3X ETF (GASL), the United States Natural Gas ETF (UNG), the United States Brent Oil ETF (BNO), the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), the PowerShares DWA Energy Momentum ETF (PXI), and the Vanguard Energy ETF (VDE).

In the final part of this series, we’ll look at some natural gas price forecasts.

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