The US is set for a year-on-year fall in gas production in 2016, despite the WTI crude oil price hovering around $50/bbl in June.
Growth in shale gas production has underpinned rises in total US gas output in recent years. However, the WTI crude front-month futures price has averaged $49.2/bbl so far in June 2016 compared with a peak of $105.2/bbl in June 2014. This has gradually eroded investment in US shale plays and any recovery is expected to be slow – despite a rebound in the oil price since February 2016 – as investors remain cautious about the durability of recent price gains.
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