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Monthly US Natural Gas Production Fell in October

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Dec. 4 2020, Updated 10:50 a.m. ET

Monthly US natural gas production figures 

The EIA (U.S. Energy Information Administration) estimated that US-marketed natural gas production fell by 0.64 Bcf (billion cubic feet) per day to 77.93 Bcf per day in October compared to September 2016—the lowest natural gas production figures since June 2014. Production fell 0.8% month-over-month and 4% year-over-year. Monthly US natural gas production fell for the eighth time in the last ten months.

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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, monthly US production peaked in February at 79.43 Bcf per day. Since then, US natural gas production fell 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. Read Crude Oil Prices and Stock Markets Rise: What’s Next? for more on crude oil prices.

EIA’s natural gas production estimates

The EIA released its monthly STEO (Short-Term Energy Outlook) report on November 8, 2016. It reported that US-marketed natural gas production could average 77.3 Bcf per day in 2016 and 80.3 Bcf per day in 2017. 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 October STEO report, the EIA estimated that US-marketed natural gas production could average 77.5 Bcf per day in 2016 and 81.2 Bcf per day in 2017.

Production is expected to rise by 2.9 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.

US oil and gas drilling activity is expected to rise after Donald Trump’s surprise victory. Read Will the US Crude Oil Rig Count Rise after the Election? and Does US Natural Gas Production Depend on Natural Gas Rigs? for more on the US crude oil rig count.

Impact of natural gas supplies 

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), EXCO Resources (XCO), Cabot Oil & Gas (COG), and Memorial Resources (MRD).

The rollercoaster ride in crude oil and natural gas prices can impact funds such as the United States Natural Gas ETF (UNG), the United States Oil ETF (USO), 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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