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Will US Natural Gas Futures Fall in 3Q17?

PART:
1 2 3 4 5 6
Part 5
Will US Natural Gas Futures Fall in 3Q17? PART 5 OF 6

Will US Natural Gas Production Surpass Consumption?

Weekly US natural gas production  

According to PointLogic’s estimates, weekly US dry natural gas production fell 0.3% to 73 Bcf (billion cubic feet) per day on August 10–16, 2017. However, production has risen 1.8 Bcf per day, or 2.5%, from the same period in 2016.

Monthly US dry natural gas production is at a ten-month high. Any rise in US natural gas production is bearish for natural gas (BOIL) (UGAZ) (UNG) prices.

Lower natural gas prices are negative for natural gas producers’ profitability like Newfield Exploration (NFX), Exco Resources (XCO), and Antero Resources (AR).

Will US Natural Gas Production Surpass Consumption?

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EIA’s natural gas production estimates  

The EIA (U.S. Energy Information Administration) estimates that US dry natural gas production will average 73.5 Bcf per day in 2017 and 77.3 Bcf per day in 2018. Production averaged 74.1 Bcf per day and 72.3 Bcf per day in 2015 and 2016, respectively. In 2016, production fell for the first time in 11 years.

Weekly US natural gas consumption 

According to PointLogic, weekly US natural gas consumption fell 0.13% to 72.4 Bcf per day on August 10–16, 2017. Consumption fell by 4.1 Bcf per day or 5.3% from the same period in 2016.

Monthly US natural gas consumption is at a two-year low. Consumption fell due to mild weather at this time of the year. The fall in natural gas consumption is negative for natural gas (DGAZ) (GASL) prices.

US natural gas consumption estimates  

According to the EIA, US natural gas consumption will average 72.6 Bcf per day in 2017 and 75.8 Bcf per day in 2018. Consumption averaged 75.1 Bcf per day in 2016 and 74.7 Bcf per day in 2015.

Impact 

Production could beat consumption in 2017 and 2018. As a result, it could weigh on natural gas prices.

In the next part of this series, we’ll take a look at some natural gas price forecasts.

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