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Wednesday February 10, 6:07 pm Eastern Time
Research group sees drop in U.S. 1999 natural gas
output
HOUSTON, Feb 10 (Reuters) - U.S. natural gas production will undergo a modest decline
in 1999 but prices will likely remain weak in the first half of the year, a research group said
on Wednesday.
Cambridge Energy Research Associates (CERA) said production would fall as a result of cutbacks in oil and gas companies'
drilling and exploration budgets brought on by the slump in world oil prices.
In 1998, worldwide crude oil prices fell below $13 a barrel from an average of $17 to $21 per barrel in the 10 previous years.
Since then, the leading New York crude futures contract has fallen below $12 a barrel. In the U.S., natural gas prices slipped
17 percent to an average of $2.11 per million British thermal units in 1998 from $2.55 per million Btus in 1997. On
Wednesday, the leading New York natural gas futures contract was trading at $1.815 per million British thermal units, down
5.3 cents from Tuesday.
Declining production from existing gas fields in the shallow waters of the Gulf of Mexico would outweigh new supply from new
deepwater fields, CERA consultants told a conference in Houston.
However, U.S. gas supplies were expected to resume their upward trend in 2000, they said.
''Prices are likely to remain weak in the first half of 1999 with a recovery beginning as soon as the second half and continuing
into 2000,'' CERA consultant Robert Esser said.
CERA said it expected prices to recover because the current surplus in gas supplies was due to mild winter weather rather
than excessive output by producers.
The group did not disclose any estimates for production or prices in 1999 or beyond.
CERA said Canada would become an increasingly important contributor to overall North American gas supplies in the coming
years.
Several major pipeline projects linking Canadian gas fields to markets in the United States are due to come on stream in the
next few yea |
