Why US Natural Gas Production Fell from a 10-Month High

According to the EIA (U.S. Energy Information Administration), monthly US dry natural gas production fell by 1.36 Bcf (billion cubic feet) per day or 1.8% to 72.9 Bcf per day in June 2017—compared to May 2017. Production fell from a ten-month high hit in May 2017.

However, US dry natural gas production rose by 1.33 Bcf per day or 1.8% from the same period in 2016. The year-over-year rise in natural gas production is bearish for natural gas (BOIL) (FCG) (UNG) prices. 

Lower natural gas prices are negative for natural gas producers’ earnings like Rice Energy (RICE), EQT (EQT), Exco Resources (XCO), and Antero Resources (AR).

PointLogic estimates that weekly US dry natural gas production fell 1.5% to 71.7 Bcf (billion cubic feet) per day on August 24–30, 2017. However, US dry natural gas production has risen 0.4% from the same period in 2016.

The EIA estimates that US dry natural gas production would average 73.5 Bcf per day in 2017 and 77.3 Bcf per day in 2018.

US production averaged 74.1 Bcf per day in 2015 and 72.3 Bcf per day in 2016. Production fell for the first time in 11 years in 2016.

High US natural gas production in 2017 and 2018 would pressure natural gas (FCG) (GASL) prices. Lower natural gas prices have a negative impact on natural gas producers’ earnings like Exco Resources and Antero Resources.

In the next part, we’ll discuss US natural gas consumption.