EIA sees increased gas consumption in Q1 2024
The mid-January cold snap over much of the central US pushed natural gas consumption in January to more than 118bn ft3/day, and that momentum will propel total consumption during the first quarter this year 5% higher, the Energy Information Administration (EIA) said February 6 in its latest Short-Term Energy Outlook(STEO).
“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,” EIA Administrator Joe DeCarolis said. “Any late-winter cold snaps could introduce significant volatility back into the natural gas market.”
The cold weather also impacted dry natural gas production in January, which fell from a record high of 106bn ft3/day in December 2023 to 102bn ft3/day in January 2024.
Production is expected to rebound in February as weather conditions improve, the EIA said, reaching about 105bn ft3/day in March, where it will remain for much of the year, producing a 2024 average of 104bn ft3/day, about 1bn ft3/day less than the forecast in the previous STEO.
With production impacted by the cold, withdrawals from storage in January increased to nearly 920bn ft3, the third highest on record, the EIA said. But because the year began with storage levels 13% higher than the five-year average, inventories are expected to remain above average and will end the winter heating season (March 31) at some 1,910bn ft3, 15% higher than the five-year average.
The Henry Hub spot price averaged $3.18/mn Btu in January, but were highly volatile through the month, spiking to $13.20/mn Btu on January 12 ahead of the expected cold weather, before settling back quickly to hit a monthly low of $2.15/mn Btu on January 23.
Mild weather for the balance of Q1 will keep the Henry Hub spot average near $2.40/mn Btu in February and March, the EIA said, but warned that “volatility could return if severely cold weather emerges, even for a short period.”