EIA sees US gas production rising in 2014

US EIA14 November 2013, News Wires – The US Energy Information Administration, EIA, expects domestic natural gas production to increase by nearly 1% next year, on the heels of what is estimated to be record levels of production this year.

The EIA estimates that marketed natural gas output in 2014 will hit 71.03 billion cubic feet per day, up 0.74 Bcfpd from 2013, according to the agency’s November Short-Term Energy Outlook, released Wednesday.

That estimate is 0.6 Bcfpd higher than its October outlook of 70.43 bcfpd.

If the forecast is realised, it would be the fourth straight year of record production, Reuters reported.

Production, driven primarily by the Marcellus shale in the Appalachian basin, has hit record high levels over the past few months even as prices have fallen, EIA said.

Increased Marcellus output has outpaced declines in the offshore Gulf of Mexico and the Haynesville shale.

The EIA also slightly raised its estimate for gas consumption in 2014, thought it still expects usage to slip 0.8% from levels this year to around 69.6 Bcfpd.

Natural gas used for power generation was expected to fall from 30.4% in 2012 to 27.4% this year, and 26.9% next year. Demand from the power sector will likely decline as gas prices rise, EIA said.

The agency sees benchmark Henry Hub gas prices averaging $3.68 per million British thermal units this year, down 3 cents from its October estimate but 34% above 2012’s estimated average of $2.75.

In 2014, EIA expects gas prices to rise 16 cents, or 4.3%, to $3.84 per MMBtu.

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