Yahoo Finance Natural Gas Consumption Continues to Inch Higher
Natural Gas Prices Fall as Supplies Outpace 5-Year Average
Natural gas consumption
In the week ended July 22, total US natural gas consumption rose 1.5% week-over-week. Increased demand from the power sector, as a result of hot summer weather, drove the rise in consumption. Total power sector consumption of natural gas rose 3.4% in the week ended July 22. We’ll look at trends in electricity generation in the next part of this series.
In the industrial sector, weekly consumption increased by a slight 0.3%. But the residential and commercial sectors’ consumption fell by 1.5%.
Higher natural gas consumption is bullish for natural gas prices (UNG), which is positive for gas producers such as Devon Energy (DVN), Southwestern Energy (SWN), Range Resources (RRC), and QEP Resources (QEP). These companies make up ~3% of the iShares U.S. Energy ETF (IYE).
Natural gas consumption forecasts for 2015
In its latest “Short-Term Energy Outlook” released on July 7, the EIA (U.S. Energy Information Administration) forecasts that total natural gas consumption will average 76.5 bcf (billion cubic feet) per day in 2015 and 76.4 bcf per day in 2016, compared to an estimated 73.5 bcf per day in 2014.
The EIA forecast assumes that greater consumption in 2015 will result from increased demand from the industrial and electrical power sectors. Demand from the power sector is forecast to grow 12.9% in 2015. It’s then expected to fall 2.7% in 2016. Lower natural gas prices are expected to result in increased natural gas consumption for electricity generation in 2015.
The EIA will release its next STEO on August 11.
Natural gas is the second-largest source of power for electricity generation in the United States, after coal. The EIA, however, forecasts that natural gas will surpass coal and become the largest source of electricity generation by 2035. In April, natural gas did surpass coal as the dominant fuel used in power generation.
In the next part of this series, we’ll take a look at recent and long-term electricity generation and consumption trends.
Industrial consumption is forecast to rise 3.3% in 2015 and 3.9% in 2016 as a result of new industrial projects coming online, predominantly in the fertilizer and chemical sectors. Demand from the residential and commercial sectors is projected to fall in 2015 and 2016.
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