EIA says gas drilling slump won't prevent low prices in 2002

By the OGJ Online Staff

HOUSTON, Jan. 8 -- The US Energy Information Administration said the sharp downturn in US gas-directed drilling rates since July will probably not reduce production enough to prevent low prices this winter and through most of 2002.

Natural gas production increased 1.7% in 2001, while demand declined an estimated 5.3%, said the EIA in its January forecast.

"We now expect domestic natural gas production to fall 400 bcf in 2002 or 2.1% and to recover to about 2001 levels in 2003," the EIA analysts said. But lower drilling rates could have important implications for market prices by 2003, according to the agency.

With gas demand projected to rise 1.2 tcf, or 5.5% this year, EIA is expecting inventories to return to normal. US wellhead prices will remain near $2/Mcf through much of 2002, but in 2003, EIA said the expected rebound in economic growth will boost demand growth by 2%. Forecasters predicted somewhat higher spot gas prices, averaging about $2.70/Mcf.

EIA attributed 2001's decline in residential gas demand to weak heating-related demand in the fourth quarter. Heating season temperatures for most of fourth quarter were above normal, causing withdrawals from storage to be delayed. If temperatures are normal for the rest of this winter, the agency said heating degree-days for the entire 2001-2002 winter season would be 14% lower than last winter.

EIA blamed a weaker industrial economy compared with last winter and the relatively warm fourth quarter of 2000 for lower gas and power consumption.

After no growth last year, the US government is projecting electricity demand will revive slightly this year as the economy improves.

The US Energy Information Administration in its January forecast predicted electricity demand will be up 0.8% in 2002 and 2.4% in 2003. This is compared with estimated demand growth in 2000 of 2.8% over 1999's level. The agency noted 2001 electricity demand in the industrial sector was adversely affected by the overall economic slowdown.

Related Articles

Phillips, ETP, Sunoco JV to build, operate Bayou Bridge oil pipeline

07/31/2015 Phillips 66, Houston; Energy Transfer Partners LP (ETP), Dallas; and Sunoco Logistics Partners LP, Philadelphia, have formed a joint venture to con...

MOL acquires Czech, Slovak retail assets

07/31/2015

MOL Group, Budapest, completed its acquisition from Eni SPA of retail outlets in the Czech Republic and Slovakia.

Joint venture advances plan for grassroots refinery in North Dakota

07/30/2015 Quantum Energy Inc., Tempe, Ariz., and a joint-venture partner Native Son Holdings LLC (NSH), The Woodlands, Tex., have filed a minor-source air qu...

Shell to shed Japanese refining assets

07/30/2015 Royal Dutch Shell PLC has entered a deal to sell nearly all of its interest in Japanese refiner Showa Shell Sekiyu KK to Idemitsu Kosan Co. Ltd. as...

BLM seeks comments on proposed Fidelity E&P Utah oil and gas project

07/30/2015 The US Bureau of Land Management is seeking public comments on Fidelity Exploration & Production Co.’s proposed oil and gas project 17 miles no...

BLM issues draft EA for Noble Energy’s latest DJ basin oil project

07/30/2015 The US Bureau of Land Management released a draft environmental assessment for Noble Energy Inc.’s proposal to develop as many as 89 oil wells in C...

Vermilion Energy farms into German acreage

07/30/2015

Vermillion Energy Inc. has signed a farm-in agreement providing access to a nearly contiguous land block in the North German basin.

PA Resources submits Tunisian field development plan

07/30/2015 PA Resources Tunisia has submitted Tunisian authorities a plan of development for Zarat field that outlines a multiphase joint venture between PA R...

Tawke oil flowing despite pipeline blast

07/30/2015 DNO ASA, Oslo, said oil production from Tawke field in the Kurdistan region of Iraq continues despite shutdown of the pipeline that carries Iraqi c...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts


Driving Growth and Efficiency with Deep Insights into Operational Data

When Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST



On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected