US natural gas production ends 5 month decline, rises nearly 1% above June – IHS

July showed production in Texas, the Midcontinent and Western US, had greatest decline

HOUSTON – US natural gas production levels in the lower 48 states increased nearly 1 per cent in July 2016, and averaged 73.3 Bcf/d, ending a five-month production decline, according to analysis from IHS Markit.

The production increase, IHS Markit said, represents a 0.6 Bcf/d (0.8 per cent) increase from production levels seen in June 2016, and brings a spark of unanticipated good news for producers of the commodity that has seen historically low price marks during the summer.

IHS Markit business unit PointLogic Energy tracks US production levels on a daily basis across 92 producing areas in the lower 48 states.

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“Areas with healthy production economics are hanging on, but declines are setting in across producing areas where the return on investment from natural gas or oil wells (associated gas) continues to be unattractive,” said Jack Weixel, vice president for analytics at PointLogic Energy, which is part of IHS Markit.

While July production levels were up versus the prior month, average production levels were down slightly versus July 2015 levels, reflecting the uneasy production environment in the industry following a multi-year surge in production levels.

“Production declines have been slower to come than many analysts have expected, given the price conditions producers’ have had to endure for much of the year,” said Weixel.

July data showed that production in Texas, the Midcontinent and the Western US, experienced the greatest decline versus June levels, with Texas down about 0.5 Bcf/d.

These declines, IHS Markit said, were overcome by slight increases in the Gulf of Mexico and the Northeast, led by the Marcellus and Utica in West Virginia.

PointLogic Energy flow-data is derived from real-time production and demand data from interstate pipelines in the lower 48 United States. These data sets are used by market participants to supplement official government natural gas supply and demand data published by the Energy Information Administration.