Total U.S. natural gas consumption has averaged 92 billion cubic feet per day (Bcf/d) during the first three weeks of December 2016, exceeding last year's level by 21% and topping the previous five-year (2011–15) average by 17%, according to data from PointLogic. This increased consumption has predominantly been driven by the residential/commercial sector, where consumption rose by 13 Bcf/d, or 45%, from the same period last year. Increased industrial and electric power consumption (power burn) account for a 1.6 Bcf/d (7%) and 1.1 Bcf/d (4%) increase over 2015, respectively. Colder-than-normal temperatures, particularly in key natural gas demand regions of the Northeast and Midwest, drove most of the increased consumption in the residential sector, while increased heating demand for electric power likely contributed to the increased power burn.
Heating demand started low in December but quickly increased. During the first week of December, heating degree days (HDD) were 2% below normal in the Lower 48 states. However, arctic temperatures moved into large portions of the region during the week ending December 15 and raised HDD 11% above normal, increasing demand for natural gas. Low temperatures in key natural gas consuming areas—including the New England, Middle Atlantic, and East and West North Central U.S. Census divisions, where HDD were more than 10% greater than normal—were the primary driver behind the increased heating demand.
Natural gas consumption levels have generally tracked temperatures. During the first week of December, natural gas consumption averaged 80 Bcf/d, slightly higher than its previous five-year (2011–15) average. From December 8–21, natural gas consumption averaged 98 Bcf/d. On December 15, natural gas consumption exceeded the 100 Bcf/d threshold for the first time in the 2016–17 heating season, reaching an estimated 111 Bcf/d. Triple-digit consumption days are generally rare in December. However, from December 15–21, natural gas consumption has averaged 103 Bcf/d and topped 100 Bcf during 4 out of 6 days. These periods of increased demand resulted in significant price swings in some parts of the country. For example, since December 1, prices at the Henry Hub have ranged between $3.41/MMBtu and $3.76/MMBtu, while prices at the Algonquin Citygate—the entry point into the New England market—reached its peak this month of $12.47/MMBtu on December 14, climbing from $3.64 on December 1.
