OREANDA-NEWS. April 12, 2017. The US Energy Information Administration (EIA) today revised lower its outlook for 2017 natural gas production amid government data showing that output still has not reacted to the increase in drilling.

US output of dry natural gas, which excludes amounts lost during production and processing, should rise in 2017 to 73.1 Bcf/d (2.1bn m?), up by about 800mn cf/d, according to the EIA's monthly Short-Term Energy Outlook. An increase of that magnitude would partially erase the 1.8 Bcf/d production decline resulting from low prices in 2016. The 2017 outlook is down by 0.8pc from the EIA's forecast in March.

The revision underscores market expectations for a slow recovery in US gas output. Some market analysts do not expect gas output to grow again until the second half of this year and only after new infrastructure in the Marcellus and Utica shales, along with a drilling ramp-up in the Permian basin, puts more gas into the US market.

The US rig count has surged this year as producers attempt to capture higher energy prices. Working US rigs rose last week to 839, up by 89pc from a year earlier. Gas rigs, which represent about a fifth of that total, increased last week to 165, a year-over-year gain of 85pc.