Natural Gas climbed at the end of the month and could continue to grow. NG closed at 4.12 much higher than expected based on seasonality. Gross natural gas production rose in July to a fresh all-time high as producers continued to drill new wells tapping the Marcellus and Utica shale’s.
Gross gas output from the 48 contiguous US states — which includes gas that does not make it to market — rose in July to 79.08 Bcf/d, up by 350mn cf/d from June and by 6.2pc from a year earlier, the US Energy Information Administration (EIA) said today in its monthly natural gas gross production report.
Gas production has surged during the past year on output from new wells in the Marcellus shale, a mammoth gas field underlying Pennsylvania, West Virginia and other states. Production has also ramped up quickly this year in the Utica shale, a gas-rich formation in Ohio. Gas wells in those fields have remained lucrative even at low prices for the heating and power plant fuel.
In addition, gas production has continued to increase from fields in the Permian basin of west Texas and southeastern New Mexico and from the Eagle Ford shale in south Texas because the oil wells there often produce large volumes of associated gas.
The EIA’s “Other States” category, which includes gas from the Marcellus and Utica shales and the oil-rich Bakken formation in North Dakota, rose in July to 31.5 Bcf/d, a 2.2pc increase from the previous month. Production from other states in July was about a fifth higher than in July 2013.
Prices pulled back slightly after weather forecasts showed warmer expectations than they had the day before. Cold weather should boost demand for home heating, and fears of an early or severe winter have recently made traders jump.
