Key US natural gas trends to track as LNG exports hit new highs

Reuters

2 days ago

LITTLETON, Colorado, Aug 14 (Reuters) - U.S. exports of LNG have scaled new highs so far this year, rising by over 20% from the same months in 2024 to cement the U.S.' position as the world's largest supplier of the super-chilled fuel.
Demand for U.S. natural gas has also climbed to record highs among commercial and industrial users, which has helped lift total U.S. gas consumption by the largest gas users by 5% from the year before to new all-time highs.
Gas prices for all major consumers have also increased notably from 2024, but are still holding below previous records scaled around 2022-2023.
Below is a breakdown of the key trends and data points covering the U.S. natural gas market so far this year and going forward.
Over the first 8 months of 2025, total U.S. LNG exports climbed by 22% or by 12.4 million tons from the same months in 2024 to a record 69 million tons, according to commodities intelligence firm Kpler.
Europe accounted for over two thirds of U.S. export volumes, followed by Asia. The top three markets were the Netherlands, France and Spain, which together accounted for 28% of total U.S. LNG shipments so far this year.
Europe has accounted for over half of U.S. LNG exports since 2022, when Russia's invasion of Ukraine triggered sanctions on Moscow and disrupted commodities flows to Europe.
Declines in European wind and hydro power electricity generation this year have also helped underpin gas use, while several European nations lifted imports of U.S. LNG in an attempt to reduce trade deficits with the U.S. once President Donald Trump returned to office.
All told, Europe's imports of U.S. LNG from January through August are up 61% compared to the first eight months of 2024.
Higher global natural gas prices - in part due to higher LNG demand from Europe - sparked gas rationing in other regions, especially in Asia where purchases of U.S. LNG have dropped 35% compared to the year before.
Declines in gas use across Asia and alongside strong U.S. LNG sales to Europe helped lift the U.S. share of global LNG exports to a record 24.5% so far this year, compared to a 21% share in 2024, Kpler data shows.
U.S. LNG export prices averaged $8.34 per thousand cubic feet over the first five months of 2025, according to data from the U.S. Energy Information Administration (EIA).
That price was 38% more than in the same months in 2024, and marks the highest average LNG price for that period since 2023.
Most major domestic gas consumers have also faced steep price climbs in 2025.
Electric power generators - the largest single gas consumers accounting for around 31% of total U.S. gas use - saw prices rise by 52% during January to May compared to the same months in 2024.
Industrial gas users, which account for 24% of U.S. gas use, faced a 32% price rise, while residential users (19% of gas use) and commercial users (12% of gas use) saw prices climb by 6% and 8% respectively compared to the year before.
The overall average price across all major U.S. gas consumers was 27% higher at around $8.81 per thousand cubic feet.
While overall U.S. gas consumption from all major usage segments hit a new high so far this year, rising gas prices have sparked shifts in gas use patterns.
The key electric power segment made its first year-over-year reduction to gas consumption since 2021 during January to May.
The 4,704 billion cubic feet of gas used by electric power firms was 4% less than during the same months in 2024, EIA data shows, and was a result of higher production from cheaper coal plants and higher supplies of renewable power.
All other major gas consumers boosted gas use this year from the year before, although by widely varying degrees.
Industrial gas users lifted consumption by 1.5%, while commercial users boosted consumption by 11%.
Residential gas consumers - which use gas mainly for heating - lifted use by 11.4% from the year before, although the trend in residential gas use remains downward as more homes boost energy efficiency and install heat pumps that run on electricity.
Gas demand from LNG exporters continues to grow at a much faster pace than all other gas use segments, and will remain a key driver of U.S. gas market sentiment and price action.
Between 2019 and 2024 gas demand for LNG exports rose by 140%, EIA data shows.
That growth rate compared to a 20% rise in demand from the electric power sector, a 2% rise in gas demand from industry, and declines in gas use among residences and offices of 12% and 5% respectively over that same period.
Total gas demand from the LNG export sector surpassed that of commercial users in 2021 and was nearly equal to that used by residences in 2024, EIA data shows.
Gas demand for LNG exports is on track to surpass the gas demand from residences in 2025, which would mean that the LNG export sector would emerge as the third largest U.S. gas consumer after electric power and industry this year.
As a result, even if gas demand from offices and homes continues to decline, sustained strength in U.S. LNG exports has the potential to set the tone for the overall U.S. domestic gas market, and could keep prices trending higher.
The opinions expressed here are those of the author, a columnist for Reuters.
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