October 15, 2015 – SNL Energy
Contrasting with 'Drilling Productivity Report,' other EIA data show gas production continues to rise
By Tom Pawlicki
The latest signal on shale production of natural gas suggests that output will fall for a fifth consecutive month after a peak was reached in June. But that indication is contrasted by separate data that suggest that new record highs in total U.S. production continued to be achieved through July and possibly September.
Production's impact on prices is significant
"The market is on high alert for the first sign of production declines that might encourage higher prices," Sheetal Nasta, analyst at RBN Energy said in a note Oct. 8. "Yet natural gas production has been hitting all-time records."
Natural gas prices have dropped from an intraday peak near $6.50/MMBtu in February 2014 to a price just above $2.40/MMBtu achieved Oct. 2. They have generally been range-bound between $2.40/MMBtu and $3.10/MMBtu since February, with November futures settling at $2.518/MMBtu on Oct. 14.
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