Oil and gas production falls in lower 48 states

by Talk Business & Politics staff (staff2@talkbusiness.net) 57 views 

Average crude oil production in the lower 48 states fell 6.1% to 8.39 million barrels per day in 2016, from 2015, according to U.S. Energy Information Administration. Also, gross withdrawals of natural gas in the lower 48 states fell 1.3% to 80.39 billion cubic feet per day in 2016, from 2015.

Crude oil and natural gas prices recovered in 2016, after falling in 2015, and as a result of the recovery, production rose in the second half of 2016. Between February 2016 and January 2017, the price of West Texas Intermediate (WTI) crude oil rose 76% to $53 per barrel, from $30 per barrel. Between the first and third quarters of 2016, the price of Henry Hub natural gas rose 44% to $2.88 per million British thermal units, from $2 per million Btu. Oil and gas prices are expected to rise in 2017 and 2018, according to the EIA.

In the Gulf of Mexico, crude oil production increased 96,000 barrels per day in 2016, from 2015. It represented the largest increase, and New Mexico and West Virginia also saw small increases as a result of rising oil prices. Texas had the largest decline in oil production, falling 239,000 barrels per day. The decrease was offset by production increases in the Permian region. The largest percentage decline in oil production was in the “Federal Offshore Pacific, where production declined 44% in 2015,” partly because of a “pipeline disruption in May 2015.”

In 2016, natural gas production rose in Pennsylvania and Ohio, “reflecting higher production from the Utica and Marcellus shale plays,” according to the EIA. “In Ohio, natural gas production in the Utica Shale, including the Point Pleasant formation, has continued to increase since 2011 because of increases in production efficiencies and favorable geologic conditions. Efficiency improvements in horizontal drilling and hydraulic fracturing in the Marcellus Shale have also driven natural gas production increases in Pennsylvania and West Virginia.” Lower prices led to declines in natural gas production outside of the Marcellus and Utica regions.

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