US natural gas output hit a record high in March
Gross output from the lower 48 states, which includes volumes lost during processing and production, rose in March to 88.8 Bcf/d, up by 1.2pc, or about 1.1 Bcf/d from February, the US Energy Information Administration (EIA) said today in its monthly production report. Production for the month was up by 11pc from a year earlier.
US gas production has surged as new pipelines in the northeast ferry more gas from the Marcellus and Utica shales to market. Producers have also continued to tap oil-rich fields like the Bakken formation and Permian basin, where wells can often producer large volumes of gas.
In addition, improvements in well design and gains in drilling efficiency have also allowed producers to capture higher profits from gas wells even at low prices. Confidence in supply growth this year has weighed on gas prices. Spot prices for gas delivered to the Henry Hub in March averaged $2.77/mmBtu, down by 11pc from a year earlier.
Gas production from Texas and New Mexico, which are home to portions of the Permian basin, have increased thanks to low development costs and higher oil prices. Output from Texas, the largest gas-producing state by volume, reached 22.7 Bcf/d in March, up by 1.3pc from a month earlier and 8.5pc higher than in March 2017.