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With warm weather, U.S. residential and commercial natural gas consumption down in 2020
U.S. residential and commercial natural gas consumption from January–March 2020 averaged about 35.6 billion cubic feet per day (Bcf/d), a decrease of 18% (7.8 Bcf/d), from January–March 2019 and was 10% (4.2 Bcf/d) lower than the 10-year (2010–2019) average, according to IHS Markit estimates for 2020 and EIA historical data. This decrease was driven by unseasonably warm weather. Total natural gas customer-weighted heating degree days (HDDs) for January–March 2020 were 13% lower than the 30-year (1981–2010) average. The primary use of natural gas by residential and commercial customers during the winter is space heating, and fewer HDDs indicate less need for heating.
January 2020, in particular, was the fifth-warmest January on record in the United States, according to the National Oceanic and Atmospheric Administration. January 2020 HDDs were 17% lower than the 30-year average. According to EIA’s Natural Gas Monthly, January 2020 U.S. natural gas consumption in the residential and commercial sectors averaged 42.3 Bcf/d. This level was 6.4 Bcf/d, or about 13%, lower than the January 2019 average, and 4.0 Bcf/d, or about 9%, lower than the 10-year average for January. January 2020 had the lowest January consumption by the residential and commercial sectors since January 2012.
Mild weather continued through the rest of the winter. HDDs in February and March totaled about 7% and 15% lower than their 30-year averages, respectively. Although EIA does not yet have data for these months, according to IHS Markit estimates and EIA historical data, U.S. residential and commercial natural gas consumption in February and March averaged 10% (4.4 Bcf/d) and 25% (9.1 Bcf/d) lower than their respective 2019 averages and 2% (0.8 Bcf/d) and 14% (4.2 Bcf/d) lower than their respective 2010–2019 averages.
Overview:
(For the week ending Wednesday, April 1, 2020)
- Natural gas spot prices fell at most locations this report week (Wednesday, March 25 to Wednesday, April 1). The Henry Hub spot price fell from $1.71 per million British thermal units (MMBtu) last Wednesday to $1.60/MMBtu yesterday.
- At the New York Mercantile Exchange (Nymex), the April 2020 contract expired Friday at $1.634/MMBtu, down 3¢/MMBtu from last Wednesday. The May 2020 contract price decreased to $1.587/MMBtu, down 13¢/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging May 2020 through April 2021 futures contracts declined 2¢/MMBtu to $2.214/MMBtu.
- The net withdrawal from working gas totaled 19 billion cubic feet (Bcf) for the week ending March 27. Working natural gas stocks total 1,986 Bcf, which is 77% more than the year-ago level and 17% more than the five-year (2015–19) average for this week.
- The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 10¢/MMBtu, averaging $2.50/MMBtu for the week ending April 1. The price of natural gasoline fell by 2%. The prices of propane, ethane, isobutane, and butane, rose by 1%, 6%, 11%, and 18%, respectively.
- According to Baker Hughes, for the week ending Tuesday, March 24, the natural gas rig count decreased by 4 to 102. The number of oil-directed rigs fell by 40 to 624. The total rig count decreased by 44, and it now stands at 728.
Prices/Supply/Demand:
Prices fall across the Lower 48 states with mixed temperatures. This report week (Wednesday, March 25 to Wednesday, April 1), the Henry Hub spot price fell 11¢ from a high of $1.71/MMBtu last Wednesday to a low of $1.60/MMBtu yesterday. Temperatures varied across the country, resulting in mixed heating and cooling demand. Temperatures were cooler than normal west of the Rocky Mountains and warmer than normal east, especially in the Southeast. At the Chicago Citygate, the price decreased 2¢ from $1.53/MMBtu last Wednesday to $1.51/MMBtu yesterday....
Front futures up 2.8 cents at $1.58
