Based on a recent analysis from the Energy Information Administration (EIA), the United States set a new record for natural gas consumption in 2023, averaging 89.1 billion cubic feet per day (Bcf/d), the highest level ever recorded. This upward trend has been consistent, with natural gas consumption growing by an average of 4% annually since 2018. The predominant increase is observed in the electric power sector, which coincides with a decline in coal-fired electric-generating capacities.
In 2023, the U.S. witnessed record-breaking natural gas consumption, averaging 89.1 Bcf/d, with a steady annual increase of 4% since 2018.
The electric power sector significantly contributed to this surge, increasing its natural gas usage by 6% during the peak months of July and August, despite cooler temperatures.
Despite a record-high for yearly natural gas consumption, residential and commercial sectors experienced reductions of 10% and 6% respectively in 2023, largely due to warmer-than-average temperatures.
The rise in natural gas usage was notably prominent from March through November 2023, where monthly consumption records were consecutively set. This surge aligns with a broader transition in the electric power sector from coal to natural gas and renewable energy sources. As coal-fired units retire, natural gas has become a primary substitute, reflecting a significant shift in energy resource dependency.
Despite generally cooler-than-normal temperatures during July and August 2023, natural gas consumption in the electric power sector rose by 6% compared to the same months in 2022. These months typically experience peak natural gas usage due to higher air-conditioning demand, recording consumption levels of 47.5 Bcf/d in July and 47.2 Bcf/d in August.
Overall, while natural gas-fired power generation increased, the total electricity generation saw minimal growth year-on-year. The most notable consumption of natural gas occurred in January 2023, reaching 106.6 Bcf/d, although it was 8% lower than January 2022. The residential sector saw a significant decrease in consumption by 10%, and the commercial sector also reduced usage by 6%, primarily due to warmer-than-average winter temperatures.
Amid price fluctuations and record-setting consumption levels, Hedgify’s platform offers an invaluable oportunity to businesses seeking to navigate and protect against such volatility in natural gas prices. Hedgify transforms market dynamics into opportunities, enabling companies to operate with more predictability and stability.
The information provided in this market insight is for general informational purposes and should not be considered financial advice. It is not intended to offer any financial recommendations or endorsements. Any decisions made based on the content are the sole responsibility of the reader.
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