Natural gas consumption in the United States reached new heights in 2023 and continued to grow into 2024. Key trends include increased demand from the electric power sector, record-low prices, and shifts in residential and commercial consumption patterns. Below are the highlights:
Rising Natural Gas Consumption:
U.S. natural gas consumption hit a record average of 89.4 billion cubic feet per day (Bcf/d) in 2023, driven by a 6.7% increase in the electric power sector.
Power generation accounted for 40% of total consumption in 2023, averaging 35.4 Bcf/d.
Residential consumption dropped to a five-year low of 12.4 Bcf/d in 2023, an 8.9% decrease from 2022, due to warmer winter temperatures. according to EIA.
2024 Consumption Trends:
Through September 2024, natural gas consumption averaged 89.8 Bcf/d, up 1% from the same period in 2023.
The electric power sector continued driving growth, with a 4% increase, consuming 38.1 Bcf/d (42% of total consumption).
Impact of Weather:
The hottest summer on record in the Northern Hemisphere (2023) and warmer-than-normal winter months boosted demand for air conditioning while reducing heating needs.
Record-Low Henry Hub Prices:
November 2024 saw Henry Hub daily spot prices drop to $1.21/MMBtu, the lowest inflation-adjusted level recorded.
The monthly average for November 2024 was $2.12/MMBtu, reflecting mild weather, strong supply, and limited export capacity.
Supply and Storage:
U.S. inventories ended October 2024 at 3.922 trillion cubic feet, the highest since 2016.
Marketed natural gas production remains steady, projected to average 113 Bcf/d in 2024, matching 2023’s record high.
Price Spikes:
Earlier in 2024, Henry Hub prices spiked to over $13/MMBtu during a cold January, contrasting with the low prices seen in November.
These trends underline the significant role of natural gas in the U.S. energy mix, with power generation leading consumption growth while residential and commercial sectors adjust to weather and market dynamics.
