Weekly natural gas supplies
Market intelligence company PointLogic reported that natural gas supplies rose by 0.6% to 80.2 Bcf (billion cubic feet) per day between June 16 and June 22. Supplies rose 1.7% from the same week in 2015. The rise in imports from Canada led to the rise in supplies. Net imports from Canada came in at 6.9 Bcf per day for the week ending June 22, 2016—compared to the previous week. It was at 5.9 Bcf per day for the same period in 2015. Natural gas supplies followed natural gas prices. For more on prices, read Part 1 of this series.
EIA’s latest monthly natural gas production figures
The EIA (U.S. Energy Information Administration) reported that the United States produced 79.1 Bcf per day of natural gas in March 2016. US natural gas production peaked at 80.1 Bcf per day in February 2016. The decline in natural gas production in March 2016 was due to the decline in production in Texas and the Marcellus Shale regions. Production also fell due to lower natural gas prices.
EIA’s natural gas production forecast
The EIA, in its latest “Short-Term Energy Outlook,” report stated that US natural gas production could average ~79.6 Bcf per day in 2016 and ~81.3 Bcf per day in 2017, respectively. Production will rise due to the production increase in US shale regions in 2016 and 2017. New pipelines coming online in the Marcellus and Utica Shale regions will likely lead to a rise in gas production for the same period. The rise in demand from Mexico will also lead to the rise in natural gas production.
The improvement in technology and advanced drilling methods led to a rise in productivity. Consequently, natural gas production increased despite lower natural gas prices. Associated production and the rise in US crude oil production in 2014 and 2015 also led to the rise in natural gas production. For more on US crude oil production, read Weekly US Crude Oil Production Hit a 21-Month Low. US natural gas production is expected to rise very slightly for the rest of 2016 due to lower natural gas prices and fewer rigs. For more on rig counts, read Part 3 of this series.
Impact of natural gas production
High natural gas production will add to US natural gas inventories. For more on natural gas inventories, read Part 2 of this series. Bullish trend of US natural gas production will limit the upside for natural gas prices.
Read the next part of this series for the latest update on natural gas consumption.