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Research Outline
Prepared for Einars R. | Delivered August 7, 2019
U.S. Natural Gas Industry
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Goals
Updated information on the U.S. Natural Gas industry, including the market outlook for 2019 through the first half of 2020, and existing & forecast expected demand/supply during this period.
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Early Findings
The EIA predicts that U.S. dry natural gas production "
will average 91.0 billion
cubic feet per day (Bcf/d)" for the rest of 2019.
The monthly average natural gas production is expected to grow throughout late 2019 and then "
decline slightly during
the first quarter of 2020 as the lagged effect of low prices in the second half of 2019 reduces natural gas-directed drilling." However, this growth will resume by the 2nd quater of 2020 and by that time, natural gas production will average 92.5 Bcf/d.
By July 2019, natural gas inventories ended at
2.7 trillion cubic
feet (Tcf), which is about
13% higher
than the previous year and 4% lower than the 5-year average.
In addition, natural gas storage injections during the "2
019 April-through-October
injection season will outpace the previous five-year average and that inventories will rise to more than 3.7 Tcf at the end of October, which would be 16% higher than October 2018 levels and slightly above to the
five-year average."
Recently, US natural gas has seen a decline in price. This decline is said to reflect the "
relatively mild weathe
r for the start of summer that led to lower than expected natural gas-fired electricity generation, which allowed natural gas inventory injections to outpace the previous
five-year average rate."
The U.S. Energy Information Administration (EIA) expects supply growth to moderate by late
2019 through 2020
. When this happens, natural gas prices will m
ost likely increase.
For the past few weeks,
natural gas demand
in the US has been expanding in annual terms.
Dry gas production in the US has been "
expanding in annual terms
for 112 consecutive weeks now, but the growth rate is weakening due to base effects." Dry gas production is projected to average
90.66 bcf/d
by the end of August and 91.05 bcf/d in September 2019.
In the US natural gas market, the first six months of 2019 was quite eventful as "
US production
hit an all-time high, global export and import concerns impacted foreign relations and international demand
continued to grow."
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