The horizontal natural gas drilling boom drove a long production growth period, but that boom topped out in September 2011, and overall monthly production has remained basically flat since then, analysts at Stephen Smith Energy Associates said in their most recent Monthly Energy Outlook. And while the number of horizontal gas rigs has fallen about 70% from its peak, several effects have worked to maintain the 18-month production plateau, they said.
Articles from Predictions
Generally moderate weather predictions, such as the Chicago area reaching the low to mid 50s Tuesday, didn’t suggest any likelihood of spot prices increasing Monday. But cash traders either thought otherwise or were looking ahead to near the end of the week, when cold fronts would be moving into such areas as the Midwest.
Predictions of moderate temperatures in most areas — except for freezing lows in much of Canada, just on the other side of the border and occasionally in sections of the Rockies — along with the additional loss of industrial load associated with a holiday weekend and fulfilled anticipation of continued storage injections prompted sizeable cash market declines across the board Sunday.
Most of the market continued to rise Wednesday, but nearly all of the increases were smaller than Tuesday. Predictions of warmer temperatures approaching, particularly in the Midwest and South and to a lesser extent in the Rockies, create a moderately bearish price outlook through the end of the week.
Despite predictions of peak temperatures near 100 in New York City generating a $4-plus increase in Transco Zone 6-New York quotes, prices fell in most of the rest of the market Thursday as the current eastern heat wave lost much of its bullish impact.
June natural gas futures rose Wednesday as analysts observed that the market was holding at current prices reasonably well in spite of predictions of abundant supply. At the closing bell June had gained 1.6 cents to $4.198 and July was up 2 cents to $4.266. June crude oil soared $3.19 to $100.10/bbl.
Colder forecasts during the Christmas weekend were in effect for many areas, and although near-term predictions varied, most points were flat to about a dime higher. All of the major declines from about a dime to the $2.65 area occurred in the Northeast, where a major weekend storm had begun departing.