Natural gas production has rebounded off the lows set in mid-May with the return of shut-in oil production. This weekend we hit production levels averaging 84.7 Bcf/d, which is 2.0 Bcf/d higher than the May low 82.7 Bcf/d.
We would have reached these levels sooner in June, but TS Cristobal knocked out almost 1.0 Bcf/d of production. That production has all returned now with GoM back to normal this past weekend. The last BSEE report (on June 12th) shows that only 7 platforms still remain evacuated.
Our view is that production has hit a bottom, and we’ll continue to see a recovery with new oil and natural gas wells being drilled. Baker Hughes continues to report a drop in oil rigs, but the Primary Vision Frac Spread Count is starting move higher. The frac spread count is 69 for the week ending June 12th, 2020 (off the low of 47).
Today’s Fundamentals:
Daily US natural gas production is estimated to be 84.1 Bcf/d this morning. Today’s estimated production is -0.63 Bcf/d to yesterday, and -0.36 Bcf/d to the 7D average.
Natural gas consumption is modelled to be 65.5 Bcf today, +2.8 Bcf compared to yesterday and -0.917 Bcf to the 7D average. US power burns are expected to be 33.2 Bcf today, and US ResComm usage is expected to be 8.2 Bcf.
Net LNG deliveries are expected to be 3.8 Bcf/d today.
Mexican exports are 5.4 Bcf/d. Net Canadian imports increased to 3.3 Bcf/d.
Bloomberg IM: Het Shah
enelyst DM: @het.co
Tel: 917-975-2960
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ION-Energy-Daily-Report-June-15-2020.pdf