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US Natural Gas Production Hit a Record in October

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Weekly US natural gas production 

US dry natural gas production rose 0.7% to 76.8 Bcf (billion cubic feet) per day on December 14–20, 2017, according to PointLogic. The production also rose 11.1% YoY (year-over-year).

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Monthly US natural gas production 

US dry natural gas production rose 3.5% to 77.6 Bcf per day in October 2017—compared to the previous month, according to the EIA. It was the highest level ever. The EIA released the data on December 29, 2017. The production also rose by 3.8 Bcf per day or 5.1% YoY.

Natural gas prices (UNG) fell ~21% in the last 12 months due to moderate weather and excess supply. Higher crude oil (DBO) prices will also increase natural gas supplies. For more details on oil and supplies, read the previous part of this series.

Weekly US natural gas consumption 

US natural gas consumption fell 7.5% to 84.8 Bcf per day on December 14–20, 2017. Consumption also fell by 17.5% from the same period in 2016. Any fall in consumption is bearish for natural gas (UNG) prices.

Lower natural gas (UGAZ) prices have a negative impact on energy producers’ (IXC) (PXI) earnings like Rex Energy (REXX), WPX Energy (WPX), and Cabot Oil & Gas (COG).

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Monthly US natural gas consumption 

US natural gas consumption rose 5.5% to 67.8 Bcf per day in October 2017—compared to the previous month, according to the EIA. The consumption also rose by 3.6 Bcf per day or 5.7% YoY.

Impact 

US natural gas production will average 79.7 Bcf per day in 2018, according to the EIA. The EIA also estimates that US natural gas consumption will average 76.9 Bcf per day in 2018. Production could surpass consumption in 2018, which would pressure natural gas (UGAZ) (BOIL) prices. However, an increase in exports would restrict the impact of excess supply. 

Next, we’ll discuss important drivers for natural gas prices this week.

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