US Natural Gas Consumption Expected to Drop 3% This Year – Energy Information Agency

WASHINGTON (UrduPoint News / Sputnik – 08th July, 2020) US natural gas consumption is forecast to fall 3 percent this year from fewer drillings due to the coronavirus pandemic and demand could decline as much as 5 percent in 2021, the Energy Information Administration said in its July outlook.

“EIA expects US natural gas consumption will decline by 3% in 2020, ” the agency said in the report on Tuesday. “The main driver of the decline is lower consumption in the industrial sector because of COVID-19 mitigation efforts and related reductions in economic activity. Forecast US natural gas consumption declines by 5% in 2021 as a result of expected rising natural gas prices.”

The EIA said it expects falling production will put upward pressure on natural gas prices through the end of 2021, lifting spot prices to an average $1.93/MMBtu in 2020 and $3.10/MMBtu in 2021.

US natural gas spot price averaged $1.63 per million British thermal units (MMBtu) in June, the lowest inflation-adjusted price going back to at least 1989, as a result of low demand.

“The rising prices will reduce the use of natural gas in the electric power sector, which will more than offset increases in natural gas consumption in the industrial, commercial, and residential sectors,” the agency said.

The EIA said it expects US dry natural gas production to average 89.2 billion cubic feet per day in 2020, down from the 92.2 billion cubic feet produced daily in 2019.�

“This 3 percent decrease is the result of falling natural gas prices that caused a decline in drilling activity and production curtailments,” it said.

For 2021, the annual average dry natural gas production is expected to decline by 6 percent to 84.2 billion cubic feet daily.

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