Canadian Energy Companies to the rescue???
Results for June 28
(in billion cf)
Current level … 2,260
Net injections … 69
Percentage full … N/A
Average daily injections
since April 1 … 8.52
Summer days left … 131
Capacity Release
AGA Weekly Storage
Gas Daily's Selected Prices
Historical AGA Storage Totals
CGA Weekly Storage
U.S. Heating/Cooling Degree Days
Analyst: U.S. on verge of major supply crunch
U.S. gas production has fallen for a fourth consecutive quarter, dipping about 1% in the three months ended June 30, according to a report this week by analyst Raymond James and Associates. And because the analyst does not foresee an upturn in production before year's end, “we continue to believe that the U.S. is on the verge of another major natural gas supply shortage, which could be felt as early as this upcoming winter.”
Raymond James said that based on a survey of 31 of the largest gas producers representing about 40% of total domestic output, it believes production fell 1% from the first quarter and 6% year over year. “Furthermore, although the rig count bottomed in March, activity levels have not yet increased substantially and are clearly far short of the levels needed to overcome natural declines,” Raymond James said.
“This indicates that we are likely to continue seeing sequential declines in production for the foreseeable future.”
Raymond James said its survey results “clearly contradict many gas bears that expected to see a sequential increase in production during the second quarter.” While the analyst does not expect declines of 3% like that reported in the first quarter, “the 1% sequential decline in production is another data point supporting our thesis that U.S. natural gas production is deteriorating rapidly.”
Although several production projects, including the Canyon Express platform in the deep-water Gulf of Mexico, are scheduled to commence production during the third quarter, “we continue to believe that production will fall at a rate of 1.5% per quarter for the foreseeable future.”
Canyon Express is expected to add about 500,000 Mcf/day of new production when it begins operation, but “it will probably take several months for the operators to test the facility and ramp up production to those levels,” Raymond James said. “Consequently, there does not appear to be much relief in sight during the third quarter.”
In addition, exploration-and-production companies have not yet dramatically accelerated their capital programs despite stronger-than-expected wellhead prices.
“The gas rig count remains at historically depressed levels and far short of the number required to increase production,” the report said. “Furthermore, even if activity levels were to resume the feverish pitch seen in early 2001, it would take at least six to 12 months for the new production to even begin to arrest the natural declines in existing wells.”
-- Mark Davidson |
