US natural gas consumption
The EIA (U.S. Energy Information Administration) estimates that monthly US natural gas consumption fell by 18.8 Bcf (billion cubic feet) per day to 77.3 Bcf per day in February 2017—compared to the previous month. Consumption fell 20% month-over-month and 12.7% year-over-year. It’s the lowest consumption levels in the last three months.
US natural gas consumption estimates
The EIA released its monthly STEO (Short-Term Energy Outlook) report on May 9, 2017. It estimates that US natural gas consumption will average 73.4 Bcf per day and 76.5 Bcf per day in 2017 and 2018, respectively. These estimates are 0.1% and 0.6% higher than previous estimates. The key driver of natural gas demand is industrial power consumption in 2017. The rise in electrical, residential, and commercial consumption would drive the demand for natural gas 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.
Impact of slowing consumption
The fall in consumption in 2017 could also pressure natural gas prices. Lower natural gas prices could have a negative impact on oil and gas producers’ earnings like Rex Energy (REXX), Rice Energy (RICE), EQT (EQT), and Antero Resources (AR).
In the final part of this series, we’ll look at some natural gas price forecasts.
WTI crude oil June futures closed at $47.83 per barrel on May 11, 2017. June futures for US crude oil rose 5.1% between May 4 and May 11, 2017.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.