US gas consumption sets new records amid price risks

The United States has reported unprecedented natural gas consumption for both winter and summer of 2024. According to the Energy Information Administration (EIA), this surge in demand occurred alongside strong output, despite a decline in drilling activity.

Key factors driving this growth included power generation, industrial needs, and exports, particularly with the launch of the new Plaquemines LNG project. In addition, colder weather had increased fuel consumption during the heating season.

Analysts at Enverus Intelligence Research (EIR) have revised their forecast for the average Henry Hub gas price through the end of 2025 to about $3.90 per million British thermal units (MBtu), which is lower than current forward prices. Still, record production continues to keep quotes from rising.

Moreover, rising fuel costs are prompting a shift away from gas in power generation towards coal, hindering the transition to greener energy sources.

The market is also challenged by US trade policies, tariffs on imported equipment, and global turmoil. Nevertheless, natural gas remains critical to the energy landscape, OilPrice notes.