Natural gas output continues to surprise to the upside.
United States natural gas production climbed to a record high for a second month in October, according to the Energy Information Administration’s latest survey of producers released today. The resiliency of production has surprised many analysts, who had anticipated that output would decline amid sharp cutbacks in investments and rig counts by producers.
Production did essentially flat-line between 72 and 73 bcf/d in the 10 months through August, but it is clearly on the rise once again, last standing at 73.54 bcf/d as of October.
Though the rig count has fallen by more than half over the past year, increasing efficiencies have allowed producers to maintain production with fewer rigs and fewer wells.
Moreover, the fury of drilling for higher-value hydrocarbons such as NGLs and crude oil has added to natural gas supplies by way of “associated gas”—natural gas that is a byproduct of drilling for oil.
Based on current trends, expect natural gas production to continue higher barring a sharp cutback in oil drilling—which is unlikely.