Americas: Production

Gas production in the US is expected to see only a marginal increase in 2017 despite improving oil prices.

The WTI crude oil front-month futures price is trading above $50 per barrel. This is supporting oil and gas production from US shale acreage, but the impact on the country’s overall gas output may not be evident until H2 2017. While high oil prices are supportive of shale gas output, not all US shale plays benefit equally. Moreover, higher gas production from US shale plays discourages non-shale output, which is partly the cause of supply tightness in regional markets such as Louisiana. This will remain a bullish factor for Henry Hub prices as the trading point is located in the state (see US reliance on shale gas a risky strategy, 18 January 2017).

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