Co-Founder & Principal at RFP Energy Solutions - Energy Consulting, Online Energy Bidding Platform & Clearinghouse for NatGas, Production Gas, RNG, RSG, Power, and Carbon Offsets. MBE certified. @RFPEnergySolutions
NatGas Short-Term Outlook Production: Low natgas prices are leading to a reduction in production in the US. Dry natgas production is expected to fall by 2% from Q1 '24 to Q2 '24, with June production averaging 102Bcf/d—down 4% from Dec' 23. This decline is due to producers announcing curtailments amid low prices and a significant price gap between natural gas and petroleum products, pushing producers to extract higher-value HGLs instead. Despite a projected 1% decrease in U.S. dry natgas production this year compared to last year, a 2% rise in '25 is expected, reaching nearly 105Bcf/d - record high. This increase is driven by a forecasted rise in natgas prices, incentivizing more drilling dry gas. Increased crude production will result in more associated natgas production. We also expect the gap between natural gas and petroleum prices to narrow in 2025, potentially keeping more HGLs in the gas stream. NatGas Consumption: For 24, U.S. natgas consumption is forecasted to remain unchanged from last year, averaging 89Bcf/d. Small increases in the Resi, Comm, and power sectors will be offset by a slight decline in the industrial sector. In May '24, natgas consumption is expected to average 72Bcf/d, 3% less than in May 23. This decrease reflects an anticipated reduction in natgas used for power gen due to cooler temperatures and increased RE generation. May typically sees lower natgas consumption in the U.S. due to reduced demand for HDDs and not yet increased CDDs. Following the Y/Y drop in May, we expect relatively flat consumption through '25. In the 2nd half of '24, natgas consumption is forecasted to average 88Bcf/d, 1% more than in the same period of '23. The Resi and Comm sectors are expected to see a 7% increase in consumption due to a forecasted colder Q4 '24 compared to the very mild Q4 '23, boosting HDDs. NatGas Consumption for Power: The growth in power gen from REs, particularly solar, in '24 compared to '23, is curbing natgas consumption beyond last year's levels. Despite a 3% increase in expected power gen this summer (May–Sep) compared to last summer, natgas consumption in the power sector is forecasted to remain similar to last summer, which recorded the highest power sector consumption. This summer, natgas-fired power gen will be driven by declines in coal-fired gene due to retirements and overall higher power gen from warmer-than-normal temperatures. Low natgas prices will also encourage the use of natgas-fired power plants. These factors will keep U.S. natgas consumption for power gen near last year's record levels. Looking ahead to the summer of 2025, the forecast is that natgas consumption for power gen will again average about 41Bcf/d, as trends of growing power demand, reduced coal-fired gen, and increased RE gen continue. There you have it. #powergenration #naturalgas #renewableenergy #shorttermnatgasforecast
