US Gas Production Up 2 Pct In Q2, S&P Global Platts Says
Natural gas production in the United States has seen an output growth of 1.9 Bcf/d recently, 2 percent up in the second quarter of 2022. Volumes coming out from the Haynesville, Appalachia, the Permian, and the SCOOP-STACK have managed to ease the strain on the tight US market, however, there is no short-term fix for high prices.
Platts Analytics data shows that in June US natural gas production reached 94.5 Bcf/d from the average of 94.5 Bcf/d recorded in the first quarter. Haynesville has been the main contributor to the output with its production rise of nearly 600 MMcf/d since March.
This was partly enabled by the decade-high rig count rise to over 70. Marcellus and Utica added an additional 420 MMcf/d over the same period while Permian contributed an additional 380 MMcf/d with SCOO-STACK contributing with an additional 280 MMcf/d rise.
US natural gas production volumes have slowly been returning to the late 2021 volumes of around 96 Bcf/d, after a sharp drop in the new year.
However, the slow growth has not brought any price relief with Henry Hub cash price averaging nearly $6/MMBtu this year, according to Platts, and no relief is expected before mid-2023.
The Freeport LNG issues have dropped the benchmark US gas prices to the $6/MMBtu mark from $9/MMBtu in May and June. Henry Hub balance-2022 forward curve averaged $6.80/MMBtu on June 21, slipping from $8.18/MMBtu just a month prior. However, there is not much change in Henry Hub prices from the second quarter of 2023 onwards, as these contracts are averaging $4.92/MMBtu.
The high prices may not come as a surprise as major producers have not changed their full-year guidance with US natural gas production expected to remain flat in 2022. US majors Chevron and ExxonMobil, did, however, increase their full-year guidance by 20 and 25 percent, respectively.
For the most part, producers in the Permian Basin have either left their guidance unchanged or made minor upward changes with Platts predicting that the US natural gas production could reach the 97 Bcf/d range in the late fourth quarter of 2022.
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