Natural gas outlook: Warmest year on record limits consumption
Total consumption for the report week was down. According to Bentek estimates, overall natural gas consumption for the nation fell by 2.2 percent. The residential/commercial sector, the biggest gas-consuming sector during the winter, consumed 5.4 percent less gas week-on-week. Industrial consumption was also down, falling by 1.6 percent. The decline in total natural gas consumption was partially mitigated by a 3.9 percent increase in natural gas consumed in the electric power sector. The Midcontinent, Southwest, and Pacific Northwest all faced colder temperatures week-on-week, and consumed 42.8 percent, 23.4 percent, and 44.8 percent more gas for electric generation, respectively. These regions are not large consumers of natural gas as a source for electricity, so these large percentages partially result from small base volumes. The Midcontinent and Pacific Northwest regions are not particularly reliant on natural gas as a source for electricity, so these percentages are relative to small bases. The Southeast, the biggest gas-consuming region for electric power, was unseasonably warm over the report week, and consumed 7.3 percent less gas for electric generation.
Total supply for the report week was down. Bentek estimates an overall supply decrease of 1.5 percent for the report period. U.S. gross and dry natural gas production were down 0.7 percent week-on-week and Canadian imports were down 9.3 percent. Imports fell most sharply in the Northeast, dropping by 34.4 percent. LNG imports, which are just a tiny fraction of overall supply, were also down by 8.8 percent.
Working natural gas in storage decreased to 3,168 Bcf as of Friday, January 11, according to EIA's WNGSR. This represents an implied net withdrawal of 148 Bcf from the previous week. This week's net withdrawal was 4 Bcf larger than the 5-year average net withdrawal of 144 Bcf, and 59 Bcf larger than last year's average net withdrawal of 89 Bcf. Inventories are currently 147 Bcf (4.4 percent) less than last year at this time and 316 Bcf (11.1 percent) greater than the 5-year average.
All three storage regions posted declines this week. Inventories in the East, West, and Producing regions decreased by 86 Bcf (the 5-year average net withdrawal is 85 Bcf), 23 Bcf (the 5-year average net withdrawal is 20 Bcf), and 39 Bcf (the 5-year average net withdrawal is 39 Bcf), respectively. In the Producing region, working natural gas inventories decreased 8 Bcf (2.8 percent) in salt cavern facilities and decreased 33 Bcf (3.7 percent) in nonsalt cavern facilities.
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