From the Energy Information Administration:
Natural gas production declines
Dry natural gas production in the Lower 48 states has declined from a February high. Average daily production was 1.5% lower in March than in February, according to Bentek Energy. Recent data show this decline continued in April, with average daily production from April 1 through April 23 1.0% lower than average production in March, and a full 2.5% lower than the average production in February. Compared to last year, average February production this year was 2.3% higher. However, March production was only 0.4% higher, and April production so far has been 1.0% lower.
Factors affecting current production trends include:
In the short term, production is forecast to continue its decline. EIA's April Drilling Productivity Report projects March-to-May decreases in gas production in six of the seven key shale regions in the Lower 48 states....MUCH MORE
- Average weekly natural gas spot prices at Henry Hub have remained below $2.50 per million British thermal unit (MMBtu) since last October. The Marcellus and Utica shale plays, where much of the production growth has occurred, showed even lower prices.
- Delays on and cancellation of other pipeline projects designed to distribute Marcellus and Utica natural gas–including the recent cancellation of the proposed Northeast Direct Pipeline, and the proposed Constitution Pipeline's failure to obtain a key water quality permit–will constrain gas movement in the key Northeast market.
- According to Baker Hughes, the number of oil and gas rigs in the Lower 48 states is the lowest it has been since Baker Hughes began tracking rig counts in 1949.
- Capital expenditures by many natural gas companies have decreased. Data from Evaluate Energy show a group of U.S. energy companies, which in 2015 together produced more than 15 billion cubic feet per day (Bcf/d) (17% of the U.S. total), reduced their combined capital expenditures by 40% from 2014 to 2015 (see graph).
- Warmer-than-normal weather persisted through the winter, which along with higher production levels resulted in record-high gas stocks for the end of the heating season–2,478 billion cubic feet on March 31, or 54% higher than the five-year (2011–15 ) end-of-March average.
...Consumption falls. Overall consumption this week fell by 1.7% as temperatures in the West continue to moderate, offsetting cold weather in the Northeast and Midwest. Residential and commercial consumption fell by 4.7%, along with industrial consumption, which fell by 1.2%, and exports to Mexico, which fell by 1.0%. Consumption of natural gas for electric power generation rose by 0.9%, as daily temperatures in the some parts of the Gulf Coast and Southeast neared 80°, driving up cooling demand in those regions....