EIA trims US gas production outlook [Oil & Gas News]NEW YORK:Al Bawaba Ltd.
The US Energy Information Administration slightly trimmed its estimate for domestic natural gas production growth in 2012, but still expects output this year to be up 3.8 per cent from 2011's record levels.
In its August short-term energy outlook, the EIA said it expected marketed natural gas production in 2012 to rise by 2.5 billion cubic feet per day (bcfd) to a record 68.72 bcfd. That forecast was down slightly from its July outlook that had output this year at 68.98 bcf daily.
EIA said it expects a small drop in production in coming months, reflecting losses from possible hurricanes and declines related to the recent slide in the gas rig count.
Data from Baker Hughes showed the gas-directed rig count fell last week to 498, the 10th drop in 11 weeks and the lowest count in about 13 years.
Dry gas drilling has become largely uneconomical at current prices, but drillers have moved rigs to more-profitable shale oil and shale gas liquid plays that still produce plenty of associated gas that ends up in the market after processing.
The agency sees production growth slowing next year as the dry gas rig count continues to erode, but output is expected to be up by another 0.8 bcfd, or 1.2 per cent, to 69.52 bcfd. That would be the third straight yearly record.
EIA also slightly trimmed its estimate for consumption this year, expecting demand to climb 3.2 bcfd, or 4.8 per cent, from 2011 to 69.82 bcfd. EIA's previous estimate for consumption in 2012 was 69.91 bcfd. EIA expects a 22 per cent jump in electric power use in 2012, primarily driven by utilities switching from coal to cheaper gas for power generation, to more than offset declines in residential and commercial use.
Growth in gas consumption is expected to slow in 2013, rising about 1.6 per cent to 70.91 bcf per day.
The EIA again revised down its forecast for liquefied natural gas imports this year for a fourth straight month as strong domestic production lessens the need for gas from overseas.
The EIA expects imports this year to drop 51 per cent from 2011 levels, to 0.47 bcf per day, according to Tuesday's report, down from 0.53 bcf per day forecast in last month's report. Imports in 2013 are expected to rise slightly to 0.58 bcf daily.
The EIA expects Henry Hub natural gas prices in 2012 to average $2.67 per million British thermal units, up slightly from last month's outlook of $2.58 but about 33 per cent below 2011's estimated average of $4.