U.S. natural gas production averaged just 70.2 billion cubic feet per day (Bcf/d) during March 2017, dropping monthly gas production to a low not seen in 33 months, according to analysis from analytics firm IHS Markit.
In July 2014, U.S. natural gas production averaged 70.3 Bcf/d, but was on the rise due to a deficit of underground storage gas following a particularly cold winter, IHS said in a report.
“Unlike just a few years ago when gas production trended steadily upward, recent U.S. natural gas production has spiraled downward for more than a year,” said Jack Weixel, vice president for analytics at PointLogic Energy, an energy business unit of IHS Markit, which tracks U.S. production levels on a daily basis across 92 producing areas in the lower-48 states, deriving real-time natural gas production data from publicly available interstate pipeline flow data.
“Two warm winters in a row have moderated prices due to lacklustre demand, and the market is waiting very patiently for a rebound. While average domestic natural gas demand was soft this past winter, increased exports from the U.S. this coming summer will put upward pressure on prices,” Weixel said. “Increased rig counts have not translated into elevated production levels yet, and this summer will be pivotal in determining just how large of a hole gas suppliers have to dig themselves out of.”
According to the IHS Markit monthly U.S. natural gas production analysis, March 2017 production was 0.7 percent below February 2017 levels. In the first quarter (Q1) of 2017, production has averaged 70.5 Bcf/d, with January and March setting new records in futility. When compared to Q1 2016 production, Q1 2017 U.S. natural gas production output is down 2.8 Bcf/d, or 3.8 percent. Of utmost concern to the market is the monthly reversal of fortune in several key producing areas.
After increasing by nearly 0.2 Bcf in February, Texas natural gas production fell more than 0.3 Bcf/d in March, and is now averaging 16.4 Bcf/d, the Lone Star state’s lowest gas production level since December 2009. The Southeast also gave back any gains seen in February, with both North and South Louisiana seeing the steepest declines in natural gas production, IHS said.
For the U.S. as a whole, March 2017 natural gas production levels are 4 percent lower (2.9 Bcf/d) than March 2016 levels. Moreover, compared to the high-water month of February 2016, domestic gas production is now 5 percent lower, or 3.7 Bcf/d.