USA natural gas production levels in the lower 48 states increased nearly 1 percent in July 2016, and averaged 73.3 billion cubic feet per day (Bcf/d), ending a five-month production decline, according to analysis from IHS Markit, a world leader in critical information, analytics and solutions.
The production increase, IHS Markit said, represents a 0.6 Bcf/d (0.8 percent) 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 U.S. production levels on a daily basis across 92 producing areas in the lower 48 states. While July 2016 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.
“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, and one of the authors of the monthly gas production analysis. “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.”
July data showed that production in Texas, the Midcontinent and the Western U.S., 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.