The Curse of Competence? | Russell T. Rudy Energy LLC
Unseasonably warm weather has driven down demand for natural gas. However, as “World Oil” reports, a debottlenecked pipeline system, prolific reserves and efficient operations have increased supply and inventories. The resulting glut has driven prices to the lowest seasonal levels in two decades.
According to the U. S. Energy Information Administration (EIA), a reduced number of rigs are freeing record gas volumes in six of the seven major shale plays in the nation. The agency predicts that even as rig counts continue to fall, supplies will keep expanding. Inventories hit an all-time high in October, briefly driving prices below $2.00 per million British Thermal Units.
The Marcellus shale (primarily in Pennsylvania) and the Utica (primarily in Ohio) have been especially important factors in the price downturn. Prolific wells in close proximity to key markets in the Northeast and upper Midwest provide a ready source of gas whenever needed.
Price relief does not appear imminent. The EIA observed that “Increases in drilling activity will continue to support growing natural gas production in the forecast despite low natural gas prices and declining rig activity.”
To read the article in its entirety, please go to http://www.worldoil.com/news/2015/11/11/gas-gushing-wells-have-stockpiles-swelling-to-record-in-the-us .
