Last updateMon, 25 Mar 2019 8pm


U.S. Natural Gas, Oil Industry Sets Records in December

In a remarkable month, the American Petroleum Institute’s latest Monthly Statistical Report shows the U.S. natural gas and oil industry established multiple records in December.

With record refinery throughput, total petroleum inventories – led by refined products – built to within 2.6% of the maximum of the 5-year historical range. Meanwhile, the U.S. also took another step closer to energy independence with petroleum net imports falling below 2.0 million barrels per day in December.

Markets remained resilient and, despite trade frictions with China, U.S. petroleum trade has found other international markets. 

U.S. to Become Net Energy Exporter by 2020

According to the EIA’s Annual Energy Outlook, the U.S. will become a net energy exporter in 2020 and remain so throughout the projection period as a result of large increases in crude oil, natural gas, and natural gas plant liquids (NGPL) production coupled with slow growth in U.S. energy consumption. Increasing energy efficiency across end-use sectors will keep U.S. energy consumption relatively flat, even as the U.S. economy continues to expand. 

Chemical Activity Shows Signs of Slower Economic Growth

The Chemical Activity Barometer (CAB) from the American Chemistry Council posted a 0.3% decline in January on a three-month moving average (3MMA) basis. This marks the barometer’s third consecutive month-over-month drop and suggests a slower rate of U.S. economic growth. On a year-over-year basis, the barometer is up 0.8% (3MMA), a pronounced slowdown in the pace of growth as compared with late last year. The unadjusted measure of the CAB was flat (0.0%) in January and declined 0.2% in December and 0.8% in November. 

API: U.S. Continues to Gain Ground as World Energy Leader

Estimated total natural gas and oil well completions rose 23% in the fourth quarter of 2018 compared to year-ago levels, according to API’s 2018 Quarterly Well Completion Report, Fourth Quarter.

Estimated total exploratory well completions for 2018 Q4 saw an increase of 23% from 2017 Q4. Total year-to-date estimated oil well completions increased 26% from 2017 Q4 to 2018 Q4. Estimated development gas well completions increased 16% from 2018 Q3 to 2018 Q4, with an increase of 13% in estimated development gas footage drilled. 

Expect Record Natural Gas Production Through 2020

EIA’s January 2019 Short-Term Energy Outlook expects several U.S. natural gas market trends from 2018 to continue into 2019 and 2020, including relatively stable Henry Hub natural gas prices and increasing natural gas production and exports. EIA expects record-high dry U.S. natural gas production to continue to grow through 2020, from an estimated 83.3 billion cubic feet per day (Bcf/d) in 2018 to 90.2 Bcf/d in 2019 and 92.2 Bcf/d in 2020. Most U.S. production will come from the Appalachian Basin in the Northeast, followed by the Permian Basin in western Texas and eastern New Mexico and the Haynesville shale formation in eastern Texas. Factors supporting continued production growth include improved drilling efficiency and cost reductions in drilling and well completions, as well as increased takeaway capacity from the highly productive Appalachia and Permian production regions. 

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