Since the onset of the new year, US gas production averages have retreated from 96 Bcf/d levels to those below 94 Bcf/D. The move downward has been observed across all primary natural gas-producing basins, with the Permian, Haynesville, and Appalachian all showing decreased flows.
Initial reports indicate a number of reasons for the fallback – seasonal start-of-year production declines, plant shutdowns, and even freeze-offs have all been blamed for the current decrease. Multiple gas facilities – some of which include those owned by Oxy, Targa, and DCP Midstream – all experienced operational issues as colder temperatures swept over Texas last weekend.
Regardless of the reason, prices have responded positively to the short-term falloff in production – in recent days, prices have crept upwards to the $3.81 mark, approaching the upper band of the $3.60-$4.00 range the front month has been consolidating in for the last month.
Source: Gelber and Associates