U.S. Natural Gas Production Gives Back August Gains in September, Says IHS Markit

September production levels fell 1.2 percent, signaling retreat from peak 2016 monthly averages

October 18, 2016

HOUSTON (October 18, 2016) – U.S. natural gas production levels in the lower 48 states declined by nearly 1.2 percent in September 2016 compared to August 2016 levels, according to analysis from IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions. September’s decline drops year-to-date production levels 1 percent compared to the same period in 2015. 

Overall, lower 48 U.S. dry gas production averaged 71.8 Bcf/d (billion cubic feet of gas/day), IHS Markit said, which represents a 0.9 Bcf/d (1.2 percent) decrease from production levels in August 2016. 

IHS Markit business unit PointLogic Energy tracks U.S. production levels on a daily basis across 92 producing areas in the lower 48 states. According to the PointLogic Energy analysis, in addition to month-to-month comparisons, annual production figures also declined year-over-year, with September 2016 production levels down by nearly 1.8 Bcf/d, or by 2.4 percent compared to September 2015 levels. IHS Markit said this production decline is directly attributable to sustained low prices for the commodity, which have persisted since the end of winter.       

“The Northeast, Rockies and South Texas regions of the country saw the largest production drop-off month-on-month, down more than 0.7 Bcf/d combined,” said Jack Weixel, vice president for analytics at PointLogic Energy, part of IHS Markit. “Within the Northeast, dry portions of the Marcellus (Pennsylvania and West Virginia) saw declines as the producing area waits on downstream infrastructure buildout to support depressed regional wellhead prices. South Texas saw its fifth straight month of declines as producers continue to retreat and move rigs further west to the Permian.”      

September data shows that the only producing areas that showed any modest gain month-on-month include the Anadarko in Oklahoma and Kansas, and small portions of the Mississippian basin, which is also in Oklahoma. 

“Henry Hub has become one of the highest-priced locations in North America,” said Sam Andrus, senior director of North American natural gas analytics at IHS Markit. “Regional production, largely from associated gas, is down, while regional demand is up. A warmer-than-normal summer, combined with growing LNG and Mexico exports, forced net storage withdrawals in the South Central region this summer. The resumption of injections in September helped keep Henry Hub prices up and has driven significant gas-to-coal switching.”       

PointLogic Energy derives real-time natural gas production data from publicly available interstate pipeline flow data in the lower 48 United States. The energy division at IHS Markit provides market insight and analytics for North American power, gas, coal and renewables.   

To speak with Jack Weixel or Sam Andrus, or for more information on PointLogic Energy or IHS Markit natural gas data and analytics, please contact Melissa Manning at melissa.manning@ihsmarkit.com

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions.  Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

PointLogic Energy delivers trusted energy market fundamental data and analysis to participants in the oil and natural gas sectors. For more information on its dynamic online tools, in-depth market coverage, and trend analysis please visit www.pointlogicenergy.com.

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IHS Media Relations, +1 303 305 8021
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