Natural gas production from the seventh largest US shale deposit will drop for a fourth straight month in October to average 1.26 billion cubic meters a day, the lowest since March, based on an Energy Information Administration forecast released Monday.
That is the longest streak of monthly declines in government data going back to 2007, Bloomberg reported.
The pullback follows a decade of surging gas production that created a glut of the heating fuel and sent prices plunging to record lows in some regions.
The biggest declines forecast for October are in oil-rich deposits such as the Eagle Ford shale formation in Texas, where drillers are idling rigs in response to a collapse in crude prices.
Pipeline constraints in Appalachia are not helping either. Yield from the Marcellus shale of the eastern US, the nation’s biggest gas field, will fall 0.5%, EIA said.
“Supply will finally fall short of demand next year,” Bank of America analysts led by Sabine Schels and Francisco Blanch said in a report.
The bank is forecasting that total output in the lower 48 states will shrink by 8.4 million cubic meters a day next year.
More than 28 million cubic meters of gas production went offline in the second quarter because of limited pipeline capacity and system outages, particularly in the northeastern Marcellus region, Adam Longson, an analyst with Morgan Stanley, said in a note to clients Monday.
"The number of drilled but incomplete wells jumped almost 50% in January through June from the same period of a year earlier," he said.
"While pipeline expansions in the fourth quarter may boost Northeast output, weak prices throughout the region may once again prompt producers to delay well completions."
