Gas rig count increases
On Friday, Baker Hughes (BHI) reported that the US natural gas rig count increased by eight to 225 for the week ending April 24. The rig count increased by 3.7% week-over-week. However, it declined 30% from the levels last year. Baker Hughes expects the rig count to decline more in 2015. The fall in the rig count indicates how it impacts oilfield service companies’ profitability like Schlumberger (SLB) and Halliburton (HAL).
Daily natural gas production from the lower 48 states in the US continued to increase on Friday from the previous day. Estimates show that the natural gas supply from dry production and wellhead production continues to outpace demand in 2015. Surprisingly, gas deliveries to residential and commercial saw a weekly increase.
Gas inventories continue to increase
The EIA (U.S. Energy Information Administration) reported that weekly gas in storage increased to 1,629 Bcf (billion cubic feet) from 1,539 Bcf. This is the highest inventory increase since November 2014. The inventories and production are increasing consistently and putting pressure on gas prices. The EIA estimates that dry natural gas production will average around 74.09 Bcf/d (billion cubic feet per day) in 2015 and 75.49 Bcf/d in 2016. The average dry gas production was at 73.75 Bcf/d during 4Q14.