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Gas Rigs Steady in U.S., Canada; Analyst Hints at Fall Marcellus Surprise

The U.S. and Canadian natural gas-directed rig counts were both unchanged in the latest tally from Baker Hughes Inc.

Among the producing states for combined oil and gas rigs, Louisiana gained four rigs while Texas saw the departure of six, representing the greatest week-to-week change in each direction. As of the latest count, the United States had 885 oil and gas rigs running, an increase of one from the previous week. Canada had 208 rigs running after three oil-directed rigs packed it in since the previous count.

The United States had 211 gas-directed rigs running while Canada had 111 gas rigs, the same tallies as the previous week in each case.

Societe Generale analysts said small week-to-week changes in domestic natural gas production levels are a "non-story" through this summer. However, come fall the Marcellus Shale could provide an October surprise.

The Marcellus usually shows a production uptick when fall is in the air, Societe Generale said. Despite weak prices this summer, production has been rather resilient wrote Societe's Breanne Dougherty.

"This resiliency during such price weakness, when combined with the regional infrastructure debottlenecking efforts, supports our expectation for a slight uptick in Marcellus production as soon as Northeast heating loads start emerging (October)," she wrote. "Our expectation is for a very slight uptick, bringing U.S. dry production back up towards 2015 highs of 73 Bcf/d, but there is risk the response will be stronger."

In the latest Baker Hughes count, the Marcellus saw the exit of one rig to land at 52 running for the week.

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