BAKU, Azerbaijan, April 11. BMI, a Fitch Solutions company, expects the weakness in the US natural gas market to persist throughout Q2 2024 due to above-average inventories, which will limit price growth, Trend reports via the company.
Current working gas in storage volumes exceed the 5-year high by 14.5 percent and are the highest since 2016. With historically lower demand during Q2, typically 16 percent below the annual monthly average based on 2010 data, driven by reduced residential usage post-winter and minimal power sector demand until Q3 cooling needs, BMI foresees limited price growth.
However, BMI anticipates a more robust increase in natural gas demand during H2 2024, particularly from the power and industrial sectors due to the favorable pricing environment.
Despite above-average temperatures forecasted for much of the US in Q3 2024, leading to heightened summer demand from the power sector, retirements of natural gas power plants and strong growth in non-hydropower renewables generation will cap demand. Nevertheless, lower-than-expected natural gas prices and an improved outlook for the broader US economy, with the 2024 real GDP forecast revised upward from 1.4 percent y-o-y to 2.1 percent y-o-y, are expected to drive significant industrial sector demand.
These factors have prompted BMI to revise their US domestic natural gas consumption forecast for 2024 upward, with an anticipated growth rate of 1.9 percent y-o-y, surpassing their initial expectation of 0.2 percent.
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