Tuesday, September 15, 2015

Natural gas production expected to decline for fourth straight month in October

Natural gas continues to tumble, with production from the seven largest U.S. shale deposits expected to drop "for a fourth straight month in October to average 44.784 billion cubic feet a day, the lowest since March, based on an Energy Information Administration forecast released Monday," Naureen Malik reports for Bloomberg. "That’s the longest streak of monthly declines in government data going back to 2007."

The biggest declines "are in oil-rich deposits such as the Eagle Ford shale formation in Texas, where drillers are idling rigs in response to a collapse in crude prices," Malik writes. "Pipeline constraints in Appalachia aren’t helping either. Yield from the Marcellus shale of the eastern U.S., the nation’s biggest gas field, will fall 0.5 percent." (Bloomberg graphic)
Bank of America analysts are "forecasting that total output in the lower 48 states will shrink by 0.3 billion cubic feet a day next year," Malik writes. "More than 1 billion cubic feet of gas production went offline in the second quarter because of limited pipeline capacity and system outages, particularly in the northeastern Marcellus region, Adam Longson, an analyst with Morgan Stanley, said in a note to clients Monday." He said "the number of drilled but uncompleted wells jumped almost 50 percent in January through June from the same period a year earlier." (Read more)

No comments: