Monthly US natural gas production figures 

The EIA (U.S. Energy Information Administration) estimated that US-marketed natural gas production fell by 0.28 Bcf (billion cubic feet) per day to 76.17 Bcf per day in September 2016—compared to August 2016. It’s the lowest natural gas production figures since June 2014. Production fell 0.4% month-over-month and 4.4% year-over-year.

Monthly US natural gas production: High and low

Monthly US production peaked at 79.7 Bcf per day in April 2015—the highest since January 2012. In 2016, the monthly US production peaked in February at 79.43 Bcf per day. Since then, US natural gas production fell for seven consecutive months due to weak natural gas and crude oil prices in early 2016. For more on prices, read Part 1 and Part 2 of this series. For more on crude oil prices, read US Refined Product Inventories Push Crude Oil Prices Up.

Monthly US Natural Gas Production Fell Again

EIA’s natural gas production estimates

The EIA released its monthly STEO (Short-Term Energy Outlook) report on October 13, 2016. It reported that US-marketed natural gas production could average 77.5 Bcf per day in 2016 and 81.2 Bcf per day in 2017. The EIA also added that US-marketed natural gas production could average 77.43 Bcf per day in 4Q16. US-marketed natural gas production averaged 78.8 Bcf per day in 2015. It would be the first annual fall in natural gas production since 2005.

In its September STEO report, the EIA estimated that US-marketed natural gas production could average 79.2 Bcf per day in 2016 and 81.6 Bcf per day in 2017.

Production is expected to rise by 3.7 Bcf per day in 2017 due to increased production in the US shale regions. Increasing demand from Mexico due to a rise in electric power demand will contribute to the rise in natural gas production in 2017.

Impact

High natural gas production could pressure natural gas prices and vice versa. Lower natural gas prices have a negative impact on oil and gas producers’ profitability like Cimarex Energy (XEC) and Memorial Resources (MRD).

The ups and downs in oil and gas prices can impact funds such as the United States Natural Gas ETF (UNG), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the Direxion Daily Natural Gas Related Bull 3X Shares ETF (GASL), and the PowerShares DWA Energy Momentum ETF (PXI).

Read the next part of this series for the latest updates on natural gas consumption.

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