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Decoding US Natural Gas Consumption Trends

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Weekly US natural gas consumption 

PointLogic estimates that US natural gas consumption rose ~2.1% to 57.8 Bcf (billion cubic feet) per day from May 31 to June 6. Consumption also increased ~7%, or by 3.8 Bcf per day, from a year ago. The rise in consumption could also have supported natural gas prices on June 7.

The year-over-year rise in natural gas consumption was due to the rise in consumption from the power, residential, and commercial sectors.

Monthly US natural gas consumption

On May 31, the EIA (U.S. Energy Information Administration) released its monthly natural gas consumption data. It reported that US natural gas consumption rose ~3.2% to 91.9 Bcf per day in March compared to the previous month. Consumption also increased 7.8 Bcf per day, or 9%, from a year ago. Consumption reached a record high of 110.6 Bcf per day in January.

US natural gas prices have increased ~79% since March 3, 2016, partly due to rising demand and exports.

The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has risen ~54.4% since March 3, 2016. XOP has exposure to energy companies involved in crude oil and natural gas exploration, production, drilling, refining, and marketing.

Resolute Energy (REN), Tellurian (TELL), Delek US Holdings (DK), and WPX Energy (WPX) account for 5.5% of XOP’s holdings. These stocks have risen 1,076%, 923%, 276%, and 243%, respectively, since March 3, 2016. They were among the top percentage gainers in XOP’s portfolio since March 3, 2016.

US natural gas consumption estimates

US natural gas consumption averaged 74.2 Bcf per day in 2017. Consumption could average ~79.1 Bcf per day in 2018 and ~79.4 Bcf per day in 2019, according to the EIA. The annual US natural gas consumption average could hit a new record in 2018 and 2019 if these projections are achieved.

Impact

If the EIA’s natural gas production and consumption projections are achieved, US natural gas production could exceed consumption in 2018, which could pressure natural gas prices. However, an increase in exports could restrict the impact of excess supply.

Next, we’ll cover US natural gas price forecasts.

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