U.S. natural gas consumption is set to fall 2.7% year-on-year in 2020, Kallanish Energy learns from the EIA’s latest Short-Term Energy Outlook (STEO).
The September report estimated natural gas consumption will reach 82.7 billion cubic feet per day (Bcf/d) this year, a year-on-year decline of 2.7%. The decrease is primarily attributed to lower consumption from the industrial sector, which the EIA estimates will average 21.9 Bcf/d in 2020 – down 1.0 Bcf/d from 2019 – as a result of reduced manufacturing activity.
The drop in total U.S. consumption also reflects lower heating demand in early 2020, contributing to residential and commercial demand in 2020 averaging 12.9 Bcf/d and 8.8 Bcf/d, respectively. These are demand contractions of 0.8 Bcf/d each, compared to 2019 levels.
Consumption for power generation is estimated to have decreased to 41 Bcf/d in August, the EIA said, down from 43.6 Bcf/d recorded in July.
U.S. LNG exports averaged 3.7 Bcf/d in August, a 19% increase from July. This increase occurred during rising spot and forward natural gas prices in Europe and Asia according to the EIA, which had “fallen to record lows in late May and June as Covid-19 mitigation efforts reduced global natural gas consumption.”
Looking forward to 2021, the EIA expects total U.S. natural gas consumption to average 79.1 Bcf/d, a 4.3% decline from 2020. This is a result of rising natural gas prices, which in turn will reduce demand for natural gas in the electric power sector.
This post appeared first on Kallanish Energy News.