US sets new natural gas demand record on first day of 2018
On Jan. 1, U.S. natural gas demand reached a record level of 150.7 billion cubic feet, according to estimates from PointLogic, surpassing the previous single-day record set in 2014.
Colder-than-average temperatures across the country led to increased demand for heating, but residential and commercial natural gas consumption did not exceed previous records. Higher consumption in the electric power and industrial sectors, increased exports to Mexico and more demand for liquefied natural gas (LNG) feedstock gas contributed to the record demand level.
Increased demand led to higher prices in natural gas and electricity markets. Day-ahead natural gas prices for delivery for January 1 were approximately $30 per million British thermal units at trading locations in the Mid-Atlantic region, New York, and Boston, according to Natural Gas Intelligence. Spot wholesale electricity prices also rose, exceeding $200 per megawatt-hour (MWh) in New York City and $185/MWh in New England, according to data from SNL Energy.
The record demand levels will likely lead to high withdrawals of natural gas from storage fields. According to the U.S. Energy Information Administration (EIA), showed that natural gas storage levels in the Lower 48 states as of December 29 were 3,126 billion cubic feet (Bcf), approximately 6 percent under the previous five-year average (2012–2016) and year-ago levels. In the East region, inventory levels were 740 Bcf, equal to previous year levels and approximately 5 percent lower than the previous five-year average. EIA will on Jan. 11. release its inventory changes report for the week ending Jan. 5.
