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Will Trump Impact US Natural Gas Consumption?

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Weekly US natural gas consumption  

Market data provider PointLogic reported that US natural gas consumption rose 13.5% between January 25, 2017, and February 1, 2017. Natural gas consumption rose 3% compared to the same period in 2016. The rise in consumption is bullish for natural gas (UNG) (FCG) (DGAZ) (UGAZ) prices. For more on what drives consumption, read Part 2 of this series.

Higher natural gas prices can have a positive impact on oil and gas producers’ profitability such as Range Resources (RRC), WPX Energy (WPX), Cimarex Energy (XEC), and Kosmos Energy (KOS). For more on natural gas prices, read Part 1 of this series.

Natural gas flows to the power sector rose week-over-week, but fell YoY (year-over-year). Gas deliveries to the residential and commercial segments rose week-over-week and YoY. Natural gas deliveries to the industrial sector also rose week-over-week and YoY.

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Gas exports to Mexico 

In 2016, the US exported ~127.4 Bcf of natural gas to Mexico monthly. It’s 200% more than it exported two years ago. On January 25, 2017, President Trump signed an order to build a wall between the US and Mexico to curb illegal immigration. It could hamper natural gas exports. It would curb supplies to Mexico and pressure natural gas prices in the US.

US natural gas consumption estimates 

The EIA (U.S. Energy Information Administration) estimates that US natural gas consumption could average 75.4 Bcf per day in 2017 and 76.9 Bcf per day in 2018. US natural gas consumption averaged 75.1 Bcf per day in 2016 and 74.7 Bcf per day in 2015. For updates on natural gas production, read the previous part of this series.

Read US Natural Gas Consumption: Bullish or Bearish for Prices? for details on monthly natural gas consumption and exports.

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 Cabot Oil & Gas (COG) and Southwestern Energy (SWN).

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

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