Will US Natural Gas Consumption Outweigh Production?

PointLogic estimates that weekly US natural gas consumption fell 6.6% to 52 Bcf per day from September 7 to 13. Consumption fell 13% year-over-year. Mild weather led to the fall in US natural gas consumption. For more on weather’s impact, see Part 2 of this series.

Any fall in natural gas consumption is bearish for natural gas (DGAZ)(UGAZ)(UNG) prices. Lower natural gas prices have a negative impact on natural gas exploration and production companies like Southwestern Energy (SWN), Rice Energy (RICE), Exco Resources (XCO), and Antero Resources (AR).

For details on the monthly US natural gas consumption, see US Natural Gas Consumption Reached a 25-Month Low.

PointLogic estimates that weekly natural gas exports to Mexico fell 2.4% to 4 Bcf per day from September 7 to 13. Natural gas exports to Mexico fell 4.8% year-over-year. 

The EIA (U.S. Energy Information Administration) released its “Short-Term Energy Outlook” (or STEO) report on September 12. It estimates that US natural gas consumption will average 72.6 Bcf per day in 2017, the same as the previous estimates made in the August STEO report.

The EIA also estimates that US natural gas consumption would average 75.8 Bcf per day in 2018, the same as the previous estimates.

US natural gas consumption averaged 75.1 Bcf per day in 2016 and 74.7 Bcf per day in 2015.

So, per EIA estimates, US natural gas production could surpass consumption in 2017 and 2018, which would weigh on natural gas (BOIL)(FCG) prices. However, booming exports could limit the impact of this excess supply.

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