Lower 48 natural gas production this month hit a once-unthinkable milestone, topping the all-important psychological threshold of 100 Bcf/d for the first time. Volumes have remained at record highs through mid-September, with year-on-year gains expanding to a breathtaking 7-9 Bcf/d above last year at this time (when hurricane-related shut-ins were in effect). The record production levels coincided with a seasonal decline in weather-related demand, as well as the ongoing outage at the Freeport LNG export terminal. Remarkably, however, even with all-time high, ~100 Bcf/d natural gas production and Freeport LNG offline, the Lower 48 gas market balance averaged tighter year-on-year — a testament to just how strong consumption has been lately, and for much of this summer for that matter. In today’s blog, we look at how the supply-demand balance has shaped up this month and where it’s headed near-term.
The last time we discussed 100 Bcf/d gas production was in late 2019 as dry gas volumes topped 96 Bcf/d for the first time. As we wrote in Un-Thinkable at the time, it seemed like 100 Bcf/d production was just around the corner. The Lower 48 gas storage inventory had built up a significant year-on-year surplus by the end of the 2019 injection season (April-October), the largest year-on-year surplus since 2016 in fact. Henry Hub prompt futures that summer averaged little more than $2.50/MMBtu, the lowest in more than 20 years. To top it off, the global gas market outlook was also bearish, and U.S. LNG export projects were struggling to justify capital investments. So, the question back then was, will there be enough demand to absorb 100 Bcf/d of supply? Of course, the point was rendered moot. The pandemic hit, lockdowns to curb the spread crushed gas demand globally and at home. Prices collapsed further to sub-$2/MMBtu levels for many months, and amid the bewildering uncertainty, producers resorted to shutting in producing wells.
Well, it took another three years to get there, but production finally crossed that 100 Bcf/d threshold this month (or at least came close, depending on who you ask and how they model production). In our model output — published daily in our NATGAS Billboard report — Lower 48 dry gas production hit a record 100.1 Bcf/d on September 6 (black dot in Figure 1).
Join Backstage Pass to Read Full Article
About the song
"Long Story Short" was written by Taylor Swift and Aaron Dessner. It appears as the 12th track on Taylor Swift's ninth studio album, Evermore. Personnel on the record were: Taylor Swift (vocals), Aaron Dessner (keyboards, drum machine, synthesizer, electric guitars, acoustic guitars, bass, sampling), Bryce Dessner (orchestrations), James McAllister (synthesizer, drum machine), Bryan Devendorf (drums, percussion), Yuki Resnick (violin), Clarice Jensen (cello), Jason Treuting (crotales), Thomas Bartlett (keyboards), and Kyle Resnick (trumpet).
Evermore was recorded between July and December 2020 at Kitty Committee and Ariel Rechtshaid Studio in Los Angeles, Long Pond in Hudson Valley New York, and Scarlet Pimpernel in London. It was produced by Aaron Dessner, Bryce Dessner, Taylor Swift, and Jack Antonoff. Released in December 2020, it went to #1 on the Billboard Top 200 Albums chart. With sales in the U.S. topping 812,000, it is eligible for Gold status with the Recording Industry Association of America. Three singles were released from the LP.
Taylor Swift is an American singer, songwriter and record producer. She signed her first publishing deal in 2004 and released her debut album in 2006. She has released nine studio albums, three live albums, 14 compilation albums, five EPs and 53 singles. Swift has sold more than 200 million records worldwide. She has won 35 American Music Awards, 29 Billboard Music Awards, one Emmy Award, 11 Grammy Awards, two Brit Awards, eight ACM Awards, 12 CMA Awards, and 14 MTV Video Music Awards, and is a member of the Songwriters Hall of Fame. She continues to tour and record, with her 10th studio album, Midnights, due to be released in October 2022.
