Friday, January 29, 2021

EIA Natural Gas Weekly Update

 From the Energy Information Administration:

for week ending January 27, 2021   |  Release date:  January 28, 2021

In the News:

Industrial sector natural gas consumption returns to pre-pandemic levels

Data from EIA’s Natural Gas Monthly show that industrial natural gas consumption (not including lease and plant fuel) in September and October 2020 exceeded consumption in those months in 2019. October 2020 consumption of 22.5 billion cubic feet per day (Bcf/d) was the highest of any October in EIA’s data going back to 2001. For the first eight months of 2020, industrial consumption of natural gas remained lower than 2019 levels, and May’s consumption of 20.2 Bcf/d was the lowest level of any month since 2017.

In the first quarter of 2020, industrial natural gas consumption was lower than first-quarter 2019 by about 0.6 Bcf/d. Some of this comparative decline in industrial natural gas consumption was the result of warmer-than-normal weather. The United States had 15% (334) fewer heating degree days (HDDs) in the first quarter of 2020 than in the first quarter of 2019.

However, March marked the beginning of efforts to mitigate the spread of COVID-19 in the United States. As the pandemic progressed, a slowing economy contributed to an overall decrease in industrial output in the second quarter of 2020. Despite a colder April in 2020, which had 71 more HDDs than in April 2019, industrial consumption of natural gas fell relative to April 2019.

Since April 2020, increases in industrial activity have contributed to an increase in industrial natural gas consumption. The Short-Term Energy Outlook’s (STEO’s) natural gas-weighted industrial production index—which reflects the growth of manufacturing subsectors and the relative importance of those subsectors to total natural gas consumption—was 15% lower in April 2020 than in April 2019. From April to October, the index rose, increasing 12%.

Not all industries are recovering at the same rate, according to the Federal Reserve’s Industrial Production data, which are used to calculate the industrial indexes EIA uses in the STEO. The production index for the entire industrial sector (including lease and plant fuel) fell by 16% from January to April, and EIA expects it to rise higher than January 2020 levels by March 2022 (based on IHS Markit economic forecasts used in the STEO). The index for chemicals, a natural-gas-intensive industry, had less of an initial decrease (6%), and returned to January 2020 levels by the end of 2020. However, the production index for primary metals (which is less natural gas intensive) fell initially by 28%, and does not return to pre-pandemic levels (January 2020 levels) during the STEO forecast period (through 2022).

Quicker recovery in industries that consume more natural gas allowed total industrial natural gas consumption to return to pre-pandemic levels in the final months of 2020, even as total industrial output did not. EIA’s STEO forecasts November 2020 industrial natural gas consumption was less than November 2019 levels by 0.5 Bcf/d, but December 2020 was 0.2 Bcf/d higher than in December 2019.....

....U.S. LNG exports decrease week over week. Eighteen liquefied natural gas (LNG) vessels (five from Sabine Pass, four each from Cameron, Corpus Christi, and Freeport, and one from Cove Point) with a combined LNG-carrying capacity of 65 Bcf departed the United States between January 21 and January 27, 2021, according to shipping data provided by Bloomberg Finance, L.P.

During the report week, U.S. LNG traffic flow was affected by the weather conditions (fog) at Sabine Pass LNG, Corpus Christi LNG, and Cameron LNG. Piloting services in the waterways around Corpus Christi LNG were suspended for part of the day on January 21, 2021. Pilot services were suspended for Sabine Pass LNG traffic on January 21, 23, and 25 because of fog conditions. Weather-related closures were also reported for several days at Lake Charles—the location of Cameron LNG.

On January 26, 2021, a new record for U.S. LNG daily loadings was set. EIA estimates that 25.4 Bcf were loaded on seven LNG tankers that departed U.S. LNG terminals on that day.