Strong production across the United States continues to bolster the natural gas supply portfolio as we head into winter. Production is on pace for another record-setting year while storage levels sit above the five-year average as the end of the injection season approaches. New U.S. Energy Information Administration drilling data suggests that improvements in rig efficiency continue to support production gains even though natural gas drilling rig counts declined during 2012.
Overall demand remains on par with last year. We see residential and commercial demand increases along with small gains in industrial usage offsetting declines in gas for power generation. The market has rationalized these facts and future expectations of weather with supply contracts through February 2014, priced between $3.70 and $4 per MMBtu. This suggests a shared market sentiment that the supply position across the country remains strong as winter approaches.
Hurricane threats for the Atlantic basin remain minimized with about one month remaining in the current season.
Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.