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March 2018: Natural Gas Demand Overview And Forecast

Mar. 06, 2018 7:35 PM ETBOIL, DCNG, DGAZ, FCG, GASX, GAZ, KOLD, MLPG, UGAZF, UNG, UNL5 Comments


  • Aggregate demand for American natural gas was up 8.0% y-o-y.
  • In March and April, total supply is still projected to grow at a slower annual pace than total demand.
  • However, supply/demand balance is likely to get looser in May.

The U.S. Energy Information Administration has recently released its natural gas monthly statistics for December 2017. In this article, we will briefly review its consumption and exports figures, then look at our latest estimates for January and February and conclude with our forecast for March, April and May.

Aggregate demand (national consumption + exports) for American natural gas was up 8.0% y-o-y in December 2017. Consumption increased by 7.0% as weather was relatively colder (there were at least 5.0% more heating-degree days in December 2017 than in December 2016). External demand also remained strong, with exports surging by almost 20.0% y-o-y due to robust pipeline inflows into Mexico and record high LNG sales. Indeed, based on Marine Traffic data, we estimate that Sabine Pass served at least 26 tankers (total natural gas carrying capacity of 80+ bcf). Strong exports growth and an increase in national consumption ensured that the growth in total demand stayed positive. In fact, on an annualized basis, aggregate demand has not posted a single negative growth figure since January 2010 (see the chart below). Indeed, total demand has been growing faster than consumption since May 2015, pointing to the rising weight of exports within the overall demand structure. On the chart below, you can clearly see how the growth rates in consumption and exports have diverged over the past year or so – while consumption has been falling lately, exports were rising and total demand growth, on balance, stayed positive, although it has slowed over the past months. Previously, however, total demand growth was almost entirely driven by national consumption.

Source: EIA, Bluegold Research estimates and calculations

Pipeline and LNG exports combined almost reached 300 bcf in December 2017, which is a new all-time record (note, that previous all-time record was recorded in November 2017 – see the chart below). The volume

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Comments (5)

This weather will confound the experts as withdrawal will continue till May, and LNG while constrained will run at maximum capacity through June. Storage will be shortened by a minimum of six weeks starting from a very low position to start with. This is based on weather exhibited around the globe with winter shattering record cold temperatures along with snow. These events are being caused by the sun as it has entered the solar minimum, if CO2 would warm the earth it is time to start increasing production of it. Remember the MSM only report stories that bolster climate warming, so all the extreme cold weather events around the globe are strangely missing.
Great article. Natural gas traders cannot live by production statistics alone.
As usual, a well written article. It appears that the manipulators are going to take the price of NG up.
EIA increased its projection of Henry Hub price yesterday to $3.10 for 2018


...and $3.19 for 2019. Expect to see some uplift from record-setting demand.
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