U.S. Natural Gas Consumption Hits Record High in January

By Editor


The U.S. Energy Information Administration (EIA) reports that natural gas consumption in the United States reached an all-time high in January, hitting 118 billion cubic feet per day (Bcf/d).

The surge in demand was primarily driven by a spell of frigid weather, which spurred increased usage for heating purposes while simultaneously hampering natural gas production. Consequently, there were significant withdrawals from natural gas inventories.

Despite the substantial withdrawals observed in January, the EIA’s February Short-Term Energy Outlook (STEO) indicates that natural gas inventories are expected to remain above the previous five-year average. This forecast is attributed to the anticipation of milder weather conditions, which are projected to temper consumption.

Looking ahead, the EIA anticipates a rise in U.S. natural gas production, with output projected to reach 105 Bcf/d in March and maintain similar levels throughout the remainder of 2024. As a consequence of increased production, the EIA expects natural gas prices to decline from January’s average of $3.18 per million British thermal units (MMBtu) to approximately $2.40/MMBtu in February and March.

Joe DeCarolis, Administrator of the EIA, remarked, “The cold weather last month sent us into record-setting natural gas consumption territory for a few days, but we expect less-than-average consumption going into February and March. Any late-winter cold snaps could introduce significant volatility back into the natural gas market.”

Key highlights from the February STEO include:

Natural Gas: The electric power sector recorded record-high natural gas consumption in January, with EIA forecasting a 5 percent increase in the first quarter of 2024 compared to the same period in 2023.

Power Sector: EIA predicts a substantial uptick in electricity generation from solar and wind sources in 2024, with solar generation expected to surge by 43 percent and wind generation by 6 percent. This growth is supported by capacity additions in the renewable energy sector.

Coal Markets: Due to planned retirements of coal-fired plants, EIA anticipates a decline in domestic coal consumption over the next two years, leading to a 19 percent decrease in U.S. coal production in 2024, followed by an additional 3 percent decline in 2025.

Crude Oil: U.S. crude oil production reached a record high of approximately 13.3 million barrels per day in December. Although production is expected to nearly return to these levels in February, a slight decrease is projected through the middle of 2024.

Global Oil Prices: The Brent crude oil spot price rose to an average of $80 per barrel in January, driven by heightened uncertainty surrounding global oil shipments due to increased attacks on vessels in the Red Sea shipping channel. EIA forecasts the Brent crude oil price to average $81 per barrel in December 2024, followed by a decline to $78 per barrel in December 2025.

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