EIA Predicts US Will Produce Most Natural Gas Ever in 2018

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On Tuesday (January 9), the US Energy Information Administration (EIA) released its short-term energy outlook, giving surprising predictions for natural gas in 2018.

In the report, the EIA predicts that 2018 will bring not only the highest US natural gas output ever, but also the biggest year-over-year jump in production to date. Natural gas production is forecast to average 80.4 billion cubic feet per day (Bcf/d) in 2018 — a 6.9 Bcf/d increase from 2017 levels.

As Bloomberg has reported, the reasons behind the EIA’s forecast stem from logistics and oil. Pipelines able to carry roughly 7 Bcf/d away from the prolific Appalachian region are due to start up this year, allowing production that’s been bottled up in the east to flood out. Meanwhile, rising oil production in the Permian Basin and elsewhere will bring increased quantities of associated natural gas.

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The EIA also projects a shift in natural gas prices in its outlook; it is calling for lower natural gas prices this year and next year compared to 2017. These predictions are important because they point to a supply and demand landscape that differs quite noticeably from previous years. In fact, an increase in production and a decrease in natural gas prices will have the current structure entirely flipped.

However, as Bloomberg explains, the export valve operates as more of a floor than an elevator when it comes to natural gas. In theory, linking higher Continue Reading

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