Natural Gas Demand - Global Market

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Production and use of natural gas only moves one way on a worldwide basis: up.

Hand-in-hand with upward movement is price volatility – and liquefied natural gas exports. LNG a few years ago was looked upon by industry watchers as the industry’s savior from the natural gas glut then getting underway. That mindset has not gone away. Look at U.S. production. In 2018, dry natural gas production in the Lower 48 U.S. states repeatedly set new records on a daily, weekly and monthly basis. In every month but December, production levels set a new record, usually by a wide margin, according to OPIS PointLogic. This record-setting performance helped the U.S. build its position as the world’s top natural gas producer.
In the U.S. during the June through November 2018 timeframe, dry gas production averaged 2.60 trillion cubic feet (Tcf) per month (85.25 Bcf per day) per Energy Information Administration data. From a demand perspective, U.S. dual-fuel power plants last summer did not switch from natural gas to coal despite gas priced higher than previously needed to flip the switch. The switch did not materialize last year, and gas demand remained strong even at higher price points. EIA data shows the volume of gas used in the power sector between June and November 2018, averaged 1.01 Tcf per month. “In short, gas-generated power has become more inelastic as it relates to competing fuels, particularly coal,” according to OPIS PointLogic.
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U.S. natural gas is the cheapest form of energy on the planet and the cleanest hydrocarbon bases fuel. It is also feedstock for the rapidly growing U.S. petrochemical business.