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U.S. Natural Gas Production Quarterly Report: The Growth Is Slowing And May Turn Negative Next Year

July 31, 2019  

The U.S. Energy Information Administration has recently released their natural gas monthly statistics for April 2019, but traders are interested in more recent data and forecasts. In this article, we will briefly review our estimates for dry gas production for the months of May, June and July and then present our latest forecast for the rest of the year.

QUICK OVERVIEW

According to our estimates, the United States has produced a total of 16,241 bcf of natural gas in six months to the end of June 2019. More than three-fourth of that volume (76%) was produced in shale plays (Marcellus, Permian, Utica, Haynesville, Eagle Ford, Barnett, Woodford, Bakken, Niobrara-Codell, Mississippian, Fayetteville and others – see the maps in the Chart Section below). The rest (23.9%) was produced in non-shale formations and offshore – specifically, in the Gulf of Mexico.

The share of shale gas production has been increasing almost uninterruptedly since April 2001. However, this trend has begun to show some telltale signs of slowing down. Indeed, the weight of “unconventional” dry gas output has been essentially flat for the past four months (see chart 1 in the Charts Section below).

As before, Marcellus basin remains the top dry gas extraction area in the U.S. Almost a quarter (24.51%) of all dry gas and more than a third (32.22%) of all shale dry gas produced in the U.S. is extracted here (see chart 2). However, over the past two years, other areas have grown in importance as well – most notably, the Permian region. Haynesville also remains one of the hottest shale resource plains, but its share in the overall natural gas production has been declining. Together, these top two areas – Marcellus and Permian – account for 52.58% of all dry gas and for about 46.34% of all shale dry gas produced in the U.S. (see chart 3).

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