U.S. Natural Gas “Off To The Races” On Strong Liquefied Natural Gas(LNG), Mexico Demand and Producer Discipline

U.S. natural gas demand and prices are “off to the races,” driven by a convergence of supply and demand-related factors as the world emerges from Covid-19, IHS Markit’s Jack Weixel, senior director, said Monday.

Publicly traded exploration and production (E&P) firms largely “are sticking to their capex guns, meaning that they are actually constraining their drilling response,” Weixel told the in-person gathering. This restraint is reflected in rig counts as well as the amount of money producers are spending in the field, he said, “which translates into essentially flat production.”

IHS Markit expects Lower 48 gas production to exit 2021 at around 92 Bcf/d.

While upstream supply has seen a decent post-pandemic recovery, “it is not doing near what it needs to do to keep up with” LNG and Mexico demand, Weixel said.

Total U.S. gas exports including LNG and Mexico have averaged a staggering 17.1 Bcf/d over the last five months, Weixel said.

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Source: Natural Gas Intelligence