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Falling US Natgas Prices Could Slow US Drilling Activity

NATGAS

A fall in US natural gas prices this year is threatening to slow drilling in the US.

  • Analysts are reducing outlooks for this year for gas prices, production, and earnings casting uncertainty over merger and acquisition activity according to energy technology firm Enverus.
  • Gas drilling rigs are forecast to fall from this month according to some analysts as services firms warn they may need to relocate equipment as operators pull back in shale regions.
  • Well completions activity in the Haynesville gas region will need to fall by about 8% to prevent storage from exceeding a limit of 4.3tcf according to Enverus. They forecast 2023 production growth of 1.7bcf/d compared to 3bcf/d in 2022.
  • Earlier this week EIA revised down its forecast for US Henry Hub gas prices after the warm weather and lower demand in Jan which allowed inventories to build. They lowered the 2023 forecast to average 3.40$/mmbtu, down from previous estimates of 4.90$/mmbtu and down almost 50% from last year.
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