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How Rise in US Natural Gas Consumption Affects Prices

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Weekly US natural gas consumption  

PointLogic reported that US natural gas consumption rose 10% between December 8 and December 14, 2016, and 29% compared to the same period in 2015. The rise in consumption is bullish for natural gas (FCG) (BOIL) (UNG) prices. 

For more on natural gas prices, read Will the Weather Push US Natural Gas Prices to New Highs? and US Natural Gas Prices Hit a 2016 High: What’s Next? Higher natural gas prices can have a positive impact on the profitability of oil and gas producers such as Cimarex Energy (XEC), Antero Resources (AR), Southwestern Energy (SWN), and Kosmos Energy (KOS).

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US natural gas exports 

Natural gas deliveries to the power sector rose week-over-week and YoY (year-over-year). To find out what drives the power sector’s natural gas consumption, read Will the Weather Push US Natural Gas Prices to New Highs? Gas deliveries to the residential and commercial segments rose week-over-week and YoY. Gas flows to the industrial sector rose week-over-week and YoY as well.

US natural gas consumption estimates 

The EIA forecasts that US natural gas consumption could average 75.2 Bcf 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 the earnings of oil and gas producers such as Cimarex Energy (XEC), Antero Resources (AR), Southwestern Energy (SWN), and Kosmos Energy (KOS).

The roller coaster ride in crude oil and natural gas prices impacts funds such as the Direxion Daily Natural Gas Related Bull 3X ETF (GASL), the ProShares Ultra Bloomberg Crude Oil ETF (UCO), the United States Oil ETF (USO), the United States Natural Gas ETF (UNG), the United States Brent Oil ETF (BNO), the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), 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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