Production trends last week
The EIA (U.S. Energy Information Administration) reported that the total natural gas supply decreased 1.2% last week—compared to the week before—according to data from Bentek Energy. However, it was ~7% greater than the same week last year.
The EIA noted that the reduced supply was a result of lower production and lower imports.
Currently, February is the last month that data is available from the EIA. The total marketed production for February was 78.6 Bcf/d (billion cubic feet per day). Marketed natural gas is the gas produced before associated liquids, like propane and butane, are extracted. The removal of these liquids leaves dry natural gas.
Forecast production trends for 2015
The EIA continues to be bullish about natural gas production in 2015. Its April STEO (Short-Term Energy Outlook) was released on April 7. It projects that the total marketed natural gas production will grow 5% to 78.47 Bcf in 2015 and by 1.9% to 79.96 Bcf in 2016. It estimates that total marketed natural gas production was 74.72 Bcf in 2014.
The next STEO will come out on May 12.
Continued production growth has set a grim scenario for natural gas prices. High production levels are bearish for natural gas prices. Weak prices hurt gas-producing companies like Chesapeake Energy (CHK), Cabot Oil and Gas (COG), Range Resources (RRC), and Antero Resources (AR). They’re all part of the iShares Global Energy ETF (IXC). They account for 1.6% of IXC.
Natural gas inventories are governed by natural gas production and consumption trends. In the next part of this series, we’ll analyze natural gas consumption trends.