The Annual Offshore Oil & Gas Event
logo

The 25thBeijing International Offshore Oil & Gas Exhibition

ufi

BEIJING,CHINA

March 26-28,2025

LOCATION :Home> News > Industry News

Stubborn natural gas supply imperils best U.S. rally in 14 years

Pubdate:2016-05-11 10:32 Source:mcc Click:
NEW YORK (Bloomberg) -- Natural gas futures have soared since March on speculation that supplies are finally falling after a decade of gains. Production numbers tell a different story.
 
Prices have gained about 30% from a 17-year low in March, the biggest advance for the period since 2002, as investors including Greenlight Capital’s David Einhorn bet the market would put a dent in supply. While money managers turned bullish on the fuel last month for the first time since 2014, government forecasts show output climbing for the next seven quarters. Explorers including Cabot Oil & Gas Corp. and EQT Corp. outpaced their own production outlooks.
 
Drillers are beating estimates as the price collapse forced them to become leaner, producing more fuel with the fewest rigs since at least the 1980s. Gas output from the Marcellus shale in the U.S. East is pushing stockpiles toward an all-time high. A rebound in crude oil prices threatens to boost supplies of gas extracted as a byproduct.
 
“The Marcellus is still going like gangbusters,” said Stephen Schork, president of energy consulting company Schork Group Inc. in Villanova, Penn. “We’re probably going to see some oil production rising as prices improve, which means associated gas production will also come back.”
 
Next-month gas futures have climbed from a low on March 3. Futures for 2017 have risen even more, surging 37% to trade above $3/MMbtu. West Texas Intermediate crude, the U.S. benchmark, has risen about 17% this year and traded at $43.62/bbl at 8:09 a.m. in New York on Tuesday.
 
Explorers are extracting more gas from the Marcellus formation, America’s biggest reservoir of the fuel, even as prices trade at the lowest seasonal levels since the 1990s. Production expanded 18% at EQT Corp. in the first quarter and 8.4% at Cabot. Marketed gas output rose to a fifth straight annual record last year, driven by shale output, which now accounts for two-thirds of total U.S. production.
 
“Cabot will be able to economically grow our natural gas production in 2017,” Dan Dinges, the company’s CEO, said on Cabot’s first-quarter earnings call April 29. “It does not take a lot of rigs and does not take many frac crews to be able to ramp our production with the quality of rock that we have.”
 
Potential demand
 
Gas bulls need a hot summer to spur demand from power plants. Unless that happens, inventories will approach physical storage limits, capping any prices gains.
 
“There’s always the risk of lower prices,” said Gordon Douthat, a senior equity analyst at Wells Fargo & Co. in Denver. “It’s probably going to come down to the demand side. If we get a cool summer, we’re going to start to have concerns about high stockpiles.”
 
Companies that primarily produce oil have also contributed to the gas supply gains. Continental Resources Inc., the Oklahoma City-based company credited with kick-starting the oil boom in North Dakota’s Bakken shale, boasted record-high output in the first quarter largely because of rising gas production.
 
Improved drilling technology has made explorers more efficient, boosting output even as they reduce costs. While the number of rigs has fallen dramatically, producers are drilling several wells from the same site, cutting longer horizontal segments through shale rock to yield more gas.
 
Greater efficiency
 
“Efficiency gains have enabled producers to drill wells faster, and some gathering pipelines came online earlier than expected, allowing them to beat well performance estimates,” said Douthat. “There were a few things that came together that allowed these guys to come in ahead of expectations.”
 
Bullish traders are undeterred, looking to pipeline data that signal a slowdown in production after supplies reached an all-time high in February. Most of the first-quarter production gains came from wells that were drilled months ago, and demand is climbing as U.S. exports rise and power plants switch to gas from coal, Douthat said. And meteorologists are predicting a hot summer in the eastern and central U.S., which would stoke demand from electricity generators.
 
“The high cost of liquefying and transporting natural gas limits competition to North American sources,” Greenlight’s Einhorn said in a quarterly letter to investors. “As existing wells deplete, supplies should fall."
 
Further declines
 
Still, output has proved more resilient than analysts anticipated, making the gas market vulnerable to further price declines. The so-called fracklog, or backlog of wells drilled before 2016 but still uncompleted, in the Marcellus has expanded to about 650 as low prices force producers to reduce expenses, data compiled by Bloomberg Intelligence show. If gas rallies, explorers may start to produce gas from these wells, curtailing a rebound.
 
Analysts have had a hard time gauging when the tipping point for gas production will occur. This time last year, forecasters were expecting futures to average $3 in 2015. The actual price was almost 40 cents lower. Prices also fell short of estimates in 2014 and 2013.
 
“Never underestimate the Marcellus,” Mark Hanson, an equity analyst at Morningstar Inc. in Chicago, said by phone May 6. “Hypothetically, if gas goes to $3.50 tomorrow, the Marcellus becomes an insanely attractive play. It would only take 15 or 20 more rigs to ramp up production in a meaningful way.”
主站蜘蛛池模板: 久久9精品久久久| 国产在线观看一区二区三区四区 | 国产精品对白交换视频| 国产一级一片免费播放i| 久久天天躁狠狠躁夜夜不卡| av片在线播放| 老师开嫩苞在线观看| 日产乱码卡一卡2卡3视频| 国产精品久久久久无码av| 人妻精品久久久久中文字幕一冢本 | 天天干天天射天天操| 国产一区二区在线视频播放| 久久久久无码精品亚洲日韩| 毛茸茸bbw亚洲人| 欧美XXXX黑人又粗又长精品| 国产欧美日韩一区二区三区| 亚洲精品午夜久久久伊人| 中文字幕人妻中文AV不卡专区| 色婷婷久久综合中文久久一本`| 暖暖日本免费中文字幕| 国产精品美女www爽爽爽视频| 免费又黄又硬又大爽日本| 中文字幕无码不卡免费视频| 麻豆国产精品免费视频| 欧美在线观看视频网站| 国产视频一区二区| 亚洲视频你懂的| japanese中文字幕| 精品人妻伦一二三区久久| 日本vs黑人hd| 午夜福利无码不卡在线观看| www.毛片在线观看| 精品一区二区三区色花堂| 成年午夜无码av片在线观看| 国产免费观看青青草原网站| 久别的草原电视剧免费观看| 四虎1515hh永久久免费| 日本强好片久久久久久AAA| 国产婷婷色一区二区三区深爱网 | 一本色道久久综合亚洲精品高清 | 男女抽搐一进一出无遮挡|