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Natural Gas Production Strong Despite Fall in May 29 Week



Natural gas production last week

The EIA (U.S. Energy Information Administration) reported that total natural gas production declined slightly by 0.85% last week compared to the week before. But it’s still ~5.4% greater than the corresponding week last year. This is according to data from Bentek Energy.

The latest EIA data for total marketed production are for the month of March. Total marketed production that month was ~78.1 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.

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Forecast production trends for 2015

The EIA continues to be bullish about natural gas production in 2015. The EIA’s May STEO (Short-Term Energy Outlook) released on May 12 projects that total marketed natural gas production will grow 6% over 2014, to 79.22 bcf (billion cubic feet) in 2015. It expects production to grow a further 1.7% to 80.56 bcf in 2016. It pegs total marketed natural gas production at 74.72 bcf for 2014. The next STEO is expected on June 9.

Continued production growth may pressure natural gas prices (UNG). Weak prices hurt gas-producing companies like Chesapeake Energy (CHK), Noble Energy (NBL), Range Resources (RRC), and Antero Resources (AR). These companies are components of the iShares U.S. Energy ETF (IYE) and make up 2.1% of the fund.

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.


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