In the March STEO, EIA estimate U.S. consumption of natural gas to average 99.1 billion cubic feet per day (Bcf/d) in the first quarter of 2023 (1Q23), down 5% from 1Q22. This would be the lowest for any quarter since 2018. The decline in consumption is the result of very mild temperatures reducing heating demand demand. The largest decline is in residential and commercial consumption, which EIA expect will be 11% less in 1Q23 than in 1Q22.
STEO Natural Gas Consumption Highlights
- In January and February, below-average U.S. natural gas consumption in the residential and commercial sectors was driven by mild winter weather across large parts of the country, particularly in the Northeast and the Midwest.
- Based on preliminary data from the National Oceanic and Atmospheric Administration for January and February, the first two months of 2023 combined were among the three warmest on record for that period going back to 1895.
- In March EIA expect natural gas consumption in the residential and commercial sectors to average almost 32 billion cubic feet per day (Bcf/d), which is close to the five-year average
- EIA expect more normal temperatures in March with a close to average number of heating degree days.
- EIA expect 2.4% (2 Bcf/d) less U.S. natural gas consumption in 2023 than in 2022.
- Reduced natural gas consumption in January and February slowed withdrawals from natural gas inventories to less than the five-year average and reduced natural gas prices.
- The spot price of natural gas at the U.S. benchmark Henry Hub averaged $2.38 per million British thermal units (MMBtu) in February, the lowest monthly average since September 2020.
- EIA expect natural gas prices to increase in the coming months. Price increases in the forecast result from rising demand from Freeport LNG reopening.
- U.S. liquefied natural gas (LNG) exports in their forecast average about 12 Bcf/d in 2023, up 14% from last year. They expect LNG exports to increase by an additional 5% in 2024.
- EIA expect natural gas production will be relatively flat for the rest of 2023 as producers reduce drilling in response to lower prices.
Source: EIA
From The TradersCommunity Desk