In the latest Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecast that decreases in natural gas consumption in the United States in 2020 will be driven by declines in natural gas used in the industrial, commercial, and residential sectors.

In the U.S. electric power sector, EIA forecasts natural gas consumption to decline in the second half of 2020 after growing in the first half of the year.

The US energy agency expects domestic consumption of natural gas in 2020 will fall 3.4 billion cubic feet per day (Bcf/d) compared with 2019, led by a 1.6 Bcf/d decline in industrial natural gas consumption.

EIA also forecasts lower overall U.S. consumption in 2020 because of reduced economic activity related to the impact of the 2019 novel coronavirus disease (COVID-19) and milder-than-normal temperatures in the first quarter of 2020 that reduced demand for space heating in buildings.

Weak economic conditions also contribute to lower industrial natural gas demand, which EIA expects to decline in the United States from an average of 21.4 Bcf/d in 2019 to an average of 19.9 Bcf/d in 2020, the first time it has dipped lower than 20.0 Bcf/d since the summer of 2016.

The report also shows that the natural gas-weighted production index, which estimates manufacturing activity based on subsectors of the manufacturing industry, will fall 15.3% between January 2020 and October 2020. If this forecast materializes, the natural gas-weighted production index is forecast to reach its lowest point since 2009.