In its most recent Short Term Energy Outlook, the EIA reported that electricity generated from natural gas reached a record high, surpassing the previous record set a year earlier. This was the result of low natural gas prices and warmer-than-usual summer temperatures.
In 2015, coal accounted for just over 33% of the U.S. power production, while natural gas was slightly under 33%. The EIA expects coal's market share to decline to 30% this year, while natural gas will grab 34%.
Natural gas traders focus on storage levels and where they stand relative to the 5-year average. IMO it is important to note that the United States now consumes a lot more gas than we did five years ago. About 8 Billion Cubic Feet per day more. In 2015 the U.S. consumed ~80 Bcfpd. We are on-track to consume ~83 Bcfpd in 2016 and forecasts are that we will be consuming over 100 Bcfpd by 2020. In addition to using more gas for power generation, we will be exporting close to 10 Bcfpd by 2020 (via pipeline to Mexico and via ship in the form of LNG).
Heading into 2017, the U.S. natural gas market will be MUCH TIGHTER than it was a year ago.
Natural Gas demand keeps going up
Natural Gas demand keeps going up
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group