The Americas Reducing The World Glut in Oil

[MajorClay]

Americas, Asia do what OPEC wouldn't: cut oil production
HOUSTON/SINGAPORE | By Terry Wade and Henning Gloystein

An oil well is seen near Denver, Colorado February 2, 2015. REUTERS/Rick Wilking
An oil well is seen near Denver, Colorado February 2, 2015.
Reuters/Rick Wilking

Wildfires in Canada. Instability in Venezuela. Stalling U.S. frackers. Drops in oil output are happening so fast that it looks as if the Americas alone could resolve global oversupply.

The 70 percent oil price slide LCOc1 CLc1 between 2014 and early 2016 has been pegged to one problem: production exceeding demand by as much as 2 million barrels per day (bpd).

But oversupply is evaporating quickly due to output cuts in the Americas - including the United States, Canada and Latin America - and also increasingly in Asia.

"Unplanned oil supply disruptions have been a key element so far this year that have contributed to a tighter oil market than was otherwise expected," said analyst Guy Baber of Simmons & Co.

If the disruptions last, there will be limited spare capacity to meet demand, Baber cautioned.

Output from the Americas dropped over 1.5 million bpd last quarter, while producers in Asia and Australia cut some 250,000 bpd, eating away large chunks of the world's oversupply, government, industry and consultancy data shows.

This comes at a time when members of the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, have refused to curb output in order to retain market share and squeeze out higher-cost competitors.

"The Saudis have achieved what they want in that the market is re-balancing through price," said senior oil analyst Neil Beveridge of Sanford C. Bernstein.

"Over the past 12 months Saudi has raised production, putting downward pressure on price to bring back discipline among the producers. This is now playing out."

In fact, with so much non-OPEC output now off the market, producers like Saudi Arabia and Qatar have been able to raise supplies and prices for shipments to Asia, the world's top oil consuming region.

Outages in Canada are also helping speed up the re-balancing, Beveridge added.

CUTS GALORE

A raging wildfire in Fort McMurray, at the heart of Canada's oil sands region, has forced more than 690,000 bpd out of production, according to Reuters estimates, with more disruptions possible.

"In the last two years, outages have not been the focus because of the imbalance in the market, but that changes now that the market is tightening," said Richard Gorry, director of JBC Energy Asia.

U.S. output, down by 410,000 bpd this year and 800,000 bpd since mid-2015, is expected to slide another 800,000 bpd in the next five months, according to the Energy Information Administration.

Latin America's crude oil production, suffering from under-investment, fell 4.6 percent in the first quarter to 9.13 million bpd, a loss of 441,000 bpd from the same period a year ago, according to data from individual countries and OPEC.

The largest decline was in Venezuela, which lost 188,000 bpd in the first quarter as President Nicolas Maduro's government wrestles a deep economic crisis.

Production is also on the wane across Asia Pacific.

China, the region's biggest producer and consumer of oil, is expected to see a 6 percent drop in crude output in 2016 due to ageing fields and poor economics, Standard Chartered bank said.

Signs of tighter supply helped lift oil prices to more than five-month highs last week. U.S. WTI crude hit an intraday high above $46 a barrel on Thursday, within striking distance of recent peaks. [O/R]

Nonetheless, with rising Middle Eastern output, near-record Russian production and brimming storage tanks, the global glut is set to stay for some time.

Brent futures for delivery five years out are only at a small $10-per-barrel premium to one-month contracts, an indication the "lower for longer" price scenario may linger.

(Additional reporting by Amanda Cooper in LONDON, Marianna Parraga in HOUSTON, and Liz Hampton in EDMONTON; Editing by Andrew Hay and Himani Sarkar)

[Smokin Joe]

Good post.

Here is where I think the DUC (Drilled but UnCompleted) wells will come in to flatten the decline curve.

(Comments in parentheses are provided for those unfamiliar with common industry acronyms)

By completing those wells, new production can be brought on line for the price of the completion, and the price will likely climb as the surplus declines, making those more attractive.

In the meantime, however, the price of frac services is unlikely to wane much, because those will remain in demand as long as the 'fraclog' (the backlog of uncompleted wells) remains the reason for wells being in DUC status to begin with.

I think there might be some intentional slowdown in completions, partly for working capital reasons, and partly because frac costs equal or exceed drilling costs, and there will be an attempt to see those drop to mirror the slowdown in drilling. With a year worth of backlog, that demand/price drop may not be as pronounced as the drop in drilling and drilling service company prices.

Keep in mind, that although production decline curves on completed wells vary by region, they generally are at 25% of IP (Initial Production) at the end of the first two years.

That means there will have to be new drilling in the next couple of years to replace depleted well capacities in order to maintain current levels, and there will be whatever lag in that to allow for supply/demand equalization to bring prices to attractive levels.

Global economic and geopolitical factors, as always, could affect that either way.

[IsailedawayfromFR]

Keep in mind, that although production decline curves on completed wells vary by region, they generally are at 25% of IP (Initial Production) at the end of the first two years.

That means there will have to be new drilling in the next couple of years to replace depleted well capacities in order to maintain current levels, and there will be whatever lag in that to allow for supply/demand equalization to bring prices to attractive levels.

Global economic and geopolitical factors, as always, could affect that either way.

all those thousands of wells currently producing that were drilled 4 to 10 years ago are actually declining very little. less than 10% per year from all the many reserves analysis I have performed.

What you are quoting is for new wells only, which will make up a small percentage of total wells count for some time.  To put it another way: since few wells are getting drilled, the decline of current production is rather small.

[Bigun]

What I find most interesting is tha all those production cuts the article mentions have yet to affect market prices all that much. Would be very interested in hearing what others think about why that is.

[Smokin Joe]

What I find most interesting is tha all those production cuts the article mentions have yet to affect market prices all that much. Would be very interested in hearing what others think about why that is.

Surplus capacity is the single biggest controlling factor, followed by location of that with geopolitical considerations (Is that capacity threatened in a war zone, for instance). A good, if somewhat dated article can be found here: http://instituteforenergyresearch.org/analysis/the-significance-of-spare-oil-capacity/ "The Significance of Spare Oil Capacity"

At present, between increased production in the US in the past decade, OPEC producing at full tilt, ISIS selling oil on the sly through Turkey, and Iran coming back on line (Thanks Obama), there is enough surplus capacity to handle the load. The theoretical increase in that from the Iran deal alone went from 1 million BOPD to 5 million BOPD

The other factor is the downstream/upstream factor. For those majors with distribution networks for refined products to get the books to work out, the price of products has to increase to significantly increase the upstream (crude oil) bids. If gas is cheap, that doesn't justify paying more for their own produced oil, but if gas prices creep up, so will the price of oil at the wellhead, because it can. For the majors this means both sectors will look better at the stock market, which is the part that keeps investors around.  (Increased demand for motor fuels will drive up fuel prices, which in turn will bolster the crude prices.)

Independents and mid-sized companies will benefit as well by increases in prices, at the wellhead and/or the pump.

[Bigun]

Surplus capacity is the single biggest controlling factor, followed by location of that with geopolitical considerations (Is that capacity threatened in a war zone, for instance). A good, if somewhat dated article can be found here: http://instituteforenergyresearch.org/analysis/the-significance-of-spare-oil-capacity/ "The Significance of Spare Oil Capacity"

At present, between increased production in the US in the past decade, OPEC producing at full tilt, ISIS selling oil on the sly through Turkey, and Iran coming back on line (Thanks Obama), there is enough surplus capacity to handle the load. The theoretical increase in that from the Iran deal alone went from 1 million BOPD to 5 million BOPD

The other factor is the downstream/upstream factor. For those majors with distribution networks for refined products to get the books to work out, the price of products has to increase to significantly increase the upstream (crude oil) bids. If gas is cheap, that doesn't justify paying more for their own produced oil, but if gas prices creep up, so will the price of oil at the wellhead, because it can. For the majors this means both sectors will look better at the stock market, which is the part that keeps investors around.  (Increased demand for motor fuels will drive up fuel prices, which in turn will bolster the crude prices.)

Independents and mid-sized companies will benefit as well by increases in prices, at the wellhead and/or the pump.

Thanks for the link Joe!  I've been pretty much out of the loop (totally at the professional level) since 2009 when I retired.

Still I would think that all of the coal production that has been taken off line in the last 8 years would have some upward effect on oil prices. But I guess all that wind energy is making up for that!  /s

[thackney]

What I find most interesting is tha all those production cuts the article mentions have yet to affect market prices all that much. Would be very interested in hearing what others think about why that is.

Stocks in the US and OCED are still quite high.  Until the production cuts effect that significantly, prices will remain relatively low.

[Smokin Joe]

Thanks for the link Joe!  I've been pretty much out of the loop (totally at the professional level) since 2009 when I retired.

Still I would think that all of the coal production that has been taken off line in the last 8 years would have some upward effect on oil prices. But I guess all that wind energy is making up for that!  /s

I think there has been a huge conversion to natural gas fired power generation, mainly because of moving target emissions standards. It isn't so much a question of meeting the requirements, as having one set of requirements which can be economically met. When the scrubbers have to be made of unobtanium....

As for Wind? To paraphrase Shakespeare, 'Thereby hangs a tail...'

[thackney]

Still I would think that all of the coal production that has been taken off line in the last 8 years would have some upward effect on oil prices. But I guess all that wind energy is making up for that!  /s

Since almost no oil (almost) is used for electric power generation these days, there is little impact between the two markets.

[Bigun]

Since almost no oil (almost) is used for electric power generation these days, there is little impact between the two markets.

That is undoubtedly true but fuel sources for heat generation are still somewhat fungible I would think.  I doubt you can remove one fuel from the marketplace without that having SOME affect on all the others in that marketplace.

[Smokin Joe]

Since almost no oil (almost) is used for electric power generation these days, there is little impact between the two markets.

Overall, the amount is very small compared to natural gas and coal, but ironically, oil generates as much as 8% of the electric power in New York--the state which banned fraccing.  http://www.powerscorecard.org/tech_detail.cfm?resource_id=8 From that link:

Burning oil to generate electricity produces significant air pollution in the forms of nitrogen oxides, and, depending on the sulfur content of the oil, sulfur dioxide and particulates. Carbon dioxide and methane (as well as other greenhouse gases), heavy metals such as mercury, and volatile organic compounds (which contribute to ground-level ozone) all can come out of the smoke stack of an oil-burning power plant.

The operation of oil-fired power plants also impacts water, land use and solid waste disposal. Similar to the operations of other conventional steam technologies, oil-fired conventional steam plants require large amounts of water for steam and cooling, and can negatively impact local water resources and aquatic habitats. Sludges and oil residues that are not consumed during combustion became a sold waste burden and contain toxic and hazardous wastes.

[IsailedawayfromFR]

I think there has been a huge conversion to natural gas fired power generation, mainly because of moving target emissions standards. It isn't so much a question of meeting the requirements, as having one set of requirements which can be economically met. When the scrubbers have to be made of unobtanium....

As for Wind? To paraphrase Shakespeare, 'Thereby hangs a tail...'

As a side note, there is a lot more installed natural gas power generation capacity than one would think.  Since the sun don't always shine and the wind don't always blow, what do you think is the backup power generation running on?

I sure hope the next real President does some real energy policy in stopping the huge economic drain in subsidizing wind and solar.  Guess what would happen?  It will take no time at all to get all that installed, little used natural gas generating capacity fired up, with results of instant spike in natural gas prices, reduction of utility costs to consumers, and of course a lot of idled solar panels and windmills.

Love that mineral name.  Dr. Cooper would likely have a fit if he found out it was a geologist who coined it.....

[Smokin Joe]

That is undoubtedly true but fuel sources for heat generation are still somewhat fungible I would think.

Well, a lot of us have fireplaces or wood stoves, but the EPA limits on those have been getting nuts, too. Actually, if you think about the people who live in newer homes, the choices are very limited: whatever runs any furnace or boiler they have, and electric space heaters (or electric heat) plus whatever passive solar they can pick up.  It's expensive to change out fuel sources.
When you consider the market demand increase for Natural Gas for electric power generation driven by the EPA war on coal, while it may not be apparent now, with reduced production, would put pressure on households which primarily use Natural Gas for heat--which is the common fuel in the northern Plains and upper Midwest, where most of the coldest temperatures in the CONUS occur. The 'war on fraccing' is also a war on Natural Gas production, and would bring about economic hardship on those regions--as well as those who use electricity for heat after the Power Plants conversion to Natural Gas, bringing those costs in line with what the Kwh costs are for solar and wind--a ridiculous increase, when you consider the end result of the lack of heat here is death in the winter.

[IsailedawayfromFR]

Overall, the amount is very small compared to natural gas and coal, but ironically, oil generates as much as 8% of the electric power in New York--the state which banned fraccing.  http://www.powerscorecard.org/tech_detail.cfm?resource_id=8 From that link:

I recall when I worked in NY of watching those huge barges filled with fuel oil on the Hudson going to ConEd power stations and to refill the residential fuel oil tanks, one of which was mine.  It was the only heating one could get as they NIMBY'd the natural gas lines and would not allow either nuclear or coal to generate electricity.

[Bigun]

Well, a lot of us have fireplaces or wood stoves, but the EPA limits on those have been getting nuts, too. Actually, if you think about the people who live in newer homes, the choices are very limited: whatever runs any furnace or boiler they have, and electric space heaters (or electric heat) plus whatever passive solar they can pick up.  It's expensive to change out fuel sources.
When you consider the market demand increase for Natural Gas for electric power generation driven by the EPA war on coal, while it may not be apparent now, with reduced production, would put pressure on households which primarily use Natural Gas for heat--which is the common fuel in the northern Plains and upper Midwest, where most of the coldest temperatures in the CONUS occur. The 'war on fraccing' is also a war on Natural Gas production, and would bring about economic hardship on those regions--as well as those who use electricity for heat after the Power Plants conversion to Natural Gas, bringing those costs in line with what the Kwh costs are for solar and wind--a ridiculous increase, when you consider the end result of the lack of heat here is death in the winter.

I'm not about to argue with that at all! All I'm saying is that I think pulling all the coal out of the mix is bound to have had some effect on the price of oil AND natural gas!

If you want to get right down to the nub of things economically speaking we would be in the process of converting all fixed installation electrical power generation facilities to new generation nuclear reactors right now if the marketplace we left to it's magic.  But anything like that happening is just a dream these days I suppose!   

[Smokin Joe]

I'm not about to argue with that at all! All I'm saying is that I think pulling all the coal out of the mix is bound to have had some effect on the price of oil AND natural gas!

If you want to get right down to the nub of things economically speaking we would be in the process of converting all fixed installation electrical power generation facilities to new generation nuclear reactors right now if the marketplace we left to it's magic.  But anything like that happening is just a dream these days I suppose!

It there wasn't a ban on reprocessing nuclear fuel, that would be great. While a lot of people have Fukushima nightmares, they forget that those units got hit with a huge earthquake AND a major tsunami.

I recall being 'initiated' into the fire department and I was washed into a pond along with a couple of other probies (me: 6-1, 240 lbs. without turnout gear) with a mere 2 1/2 inch line with 300 psi--I can't imagine the force generated by a 30 ft. high wall of water. Let's just say "tremendous".

Those hazards can be avoided by the right siting arrangements. Reprocessing would reduce the spent fuel rod problem to a relatively small waste burden, and the only tough part which remains is finding a place to dispose of that.

The real reason for the 'war on coal' is to increase prices across the board. This was one of Obama's stated goals--to increase energy costs for the consumer, be that gasoline, electricity, or Natural Gas.

Those of us in the industry were well aware of the war on hydraulic fracturing, using tactics much like those observed in the recent primary contest against certain candidates.

The War on Coal was announced and carried out with the full force of the EPA, which tried to find fault with fraccing, but failed. The process is proven.

 Attempts to characterize possible disposal well induced earthquake activity as the fault of fraccing are just misleading the public. Disposal wells and frac jobs are two entirely different things.

When the EPA failed in an attempt to prove that fraccing had messed up the historically bad water in Pavilion, WY, the EPA gave Pavilion, WY, Riverton, WY, and over a million acres of Wyoming (some of it privately owned) to the Wind River Indian Tribe (Illegal, and being contested--the EPA has no authority to change state boundaries; that takes an act of Congress), and Wyoming is dead set against the move.

The net effect, however, had these efforts been universally successful, would have been to raise the costs of energy across the board. Not even wood pellet and wood burning stoves and boilers have been left out of this, as regulations have been tightened on these as well.

That would have brought the costs of traditional fuels for heating, electrical generation, and motor fuels up to where windmills, solar power, and electric vehicles (where they will work) could compete, at grievous expense to the average person.

(That's all provided so people know why when Trump said he would use the EPA to the fullest extent of the law to enforce the renewable fuels mandate it was the deal-breaker for me. Of all agencies which should be disbanded, that one is first on my list.)

[Bigun]

It there wasn't a ban on reprocessing nuclear fuel, that would be great. While a lot of people have Fukushima nightmares, they forget that those units got hit with a huge earthquake AND a major tsunami.

I recall being 'initiated' into the fire department and I was washed into a pond along with a couple of other probies (me: 6-1, 240 lbs. without turnout gear) with a mere 2 1/2 inch line with 300 psi--I can't imagine the force generated by a 30 ft. high wall of water. Let's just say "tremendous".

Those hazards can be avoided by the right siting arrangements. Reprocessing would reduce the spent fuel rod problem to a relatively small waste burden, and the only tough part which remains is finding a place to dispose of that.

The real reason for the 'war on coal' is to increase prices across the board. This was one of Obama's stated goals--to increase energy costs for the consumer, be that gasoline, electricity, or Natural Gas.

Those of us in the industry were well aware of the war on hydraulic fracturing, using tactics much like those observed in the recent primary contest against certain candidates.

The War on Coal was announced and carried out with the full force of the EPA, which tried to find fault with fraccing, but failed. The process is proven.

 Attempts to characterize possible disposal well induced earthquake activity as the fault of fraccing are just misleading the public. Disposal wells and frac jobs are two entirely different things.

When the EPA failed in an attempt to prove that fraccing had messed up the historically bad water in Pavilion, WY, the EPA gave Pavilion, WY, Riverton, WY, and over a million acres of Wyoming (some of it privately owned) to the Wind River Indian Tribe (Illegal, and being contested--the EPA has no authority to change state boundaries; that takes an act of Congress), and Wyoming is dead set against the move.

The net effect, however, had these efforts been universally successful, would have been to raise the costs of energy across the board. Not even wood pellet and wood burning stoves and boilers have been left out of this, as regulations have been tightened on these as well.

That would have brought the costs of traditional fuels for heating, electrical generation, and motor fuels up to where windmills, solar power, and electric vehicles (where they will work) could compete, at grievous expense to the average person.

(That's all provided so people know why when Trump said he would use the EPA to the fullest extent of the law to enforce the renewable fuels mandate it was the deal-breaker for me. Of all agencies which should be disbanded, that one is first on my list.)

There are so many things Trump has said that are worthy of our complete disdain it's hard to keep track of them all but you are right! That one should be right at the top of any thinking person's list!

[Bigun]

It there wasn't a ban on reprocessing nuclear fuel, that would be great. While a lot of people have Fukushima nightmares, they forget that those units got hit with a huge earthquake AND a major tsunami.

I recall being 'initiated' into the fire department and I was washed into a pond along with a couple of other probies (me: 6-1, 240 lbs. without turnout gear) with a mere 2 1/2 inch line with 300 psi--I can't imagine the force generated by a 30 ft. high wall of water. Let's just say "tremendous".

Those hazards can be avoided by the right siting arrangements. Reprocessing would reduce the spent fuel rod problem to a relatively small waste burden, and the only tough part which remains is finding a place to dispose of that.

The real reason for the 'war on coal' is to increase prices across the board. This was one of Obama's stated goals--to increase energy costs for the consumer, be that gasoline, electricity, or Natural Gas.

Those of us in the industry were well aware of the war on hydraulic fracturing, using tactics much like those observed in the recent primary contest against certain candidates.

The War on Coal was announced and carried out with the full force of the EPA, which tried to find fault with fraccing, but failed. The process is proven.

 Attempts to characterize possible disposal well induced earthquake activity as the fault of fraccing are just misleading the public. Disposal wells and frac jobs are two entirely different things.

When the EPA failed in an attempt to prove that fraccing had messed up the historically bad water in Pavilion, WY, the EPA gave Pavilion, WY, Riverton, WY, and over a million acres of Wyoming (some of it privately owned) to the Wind River Indian Tribe (Illegal, and being contested--the EPA has no authority to change state boundaries; that takes an act of Congress), and Wyoming is dead set against the move.

The net effect, however, had these efforts been universally successful, would have been to raise the costs of energy across the board. Not even wood pellet and wood burning stoves and boilers have been left out of this, as regulations have been tightened on these as well.

That would have brought the costs of traditional fuels for heating, electrical generation, and motor fuels up to where windmills, solar power, and electric vehicles (where they will work) could compete, at grievous expense to the average person.

(That's all provided so people know why when Trump said he would use the EPA to the fullest extent of the law to enforce the renewable fuels mandate it was the deal-breaker for me. Of all agencies which should be disbanded, that one is first on my list.)

@Smokin Joe

http://www.world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-power-reactors/advanced-nuclear-power-reactors.aspx

[Smokin Joe]

@Smokin Joe

http://www.world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-power-reactors/advanced-nuclear-power-reactors.aspx

Thanks for that info...reading now.

[thackney]

I'm not about to argue with that at all! All I'm saying is that I think pulling all the coal out of the mix is bound to have had some effect on the price of oil AND natural gas!

If you want to get right down to the nub of things economically speaking we would be in the process of converting all fixed installation electrical power generation facilities to new generation nuclear reactors right now if the marketplace we left to it's magic.  But anything like that happening is just a dream these days I suppose!

http://www.eia.gov/totalenergy/data/monthly/pdf/flow/petroleum.pdf

http://www.eia.gov/totalenergy/data/monthly/pdf/flow/electricity.pdf

Demand changes in the electrical power market make very little impact in the petroleum market.

The price per BTU of energy for petroleum, even at today's low prices, compared to the option just doesn't create more demand for electricity from petroleum.  Only where other limits in fuel accessibility cause any real demand for petroleum used for electricity.

[Just_Victor]

http://www.eia.gov/totalenergy/data/monthly/pdf/flow/petroleum.pdf

http://www.eia.gov/totalenergy/data/monthly/pdf/flow/electricity.pdf

Demand changes in the electrical power market make very little impact in the petroleum market.

The price per BTU of energy for petroleum, even at today's low prices, compared to the option just doesn't create more demand for electricity from petroleum.  Only where other limits in fuel accessibility cause any real demand for petroleum used for electricity.

Seems a little counter intuitive.  I guess perhaps that means the electrical generation use of petroleum is a smaller amount of the total oil market than I would have thought.



Edited:  And pull up the graphic, and the answer is right there.  Electric power - 0.14 (<1% of oil consumption)

[Bigun]

Seems a little counter intuitive.  I guess perhaps that means the electrical generation use of petroleum is a smaller amount of the total oil market than I would have thought.



Edited:  And pull up the graphic, and the answer is right there.  Electric power - 0.14 (<1% of oil consumption)

Regardless, all the coal that has been removed from the marketplace was being used for SOME purpose and unless those users just shut down they had to replace the coal they were using with something else. I believe it is all interactive meaning that you can't mess with one part of the energy supply without disturbing all the others to some degree.

[thackney]

Regardless, all the coal that has been removed from the marketplace was being used for SOME purpose and unless those users just shut down they had to replace the coal they were using with something else. I believe it is all interactive meaning that you can't mess with one part of the energy supply without disturbing all the others to some degree.

Coal becomes more expensive due to regulations.  You own an electric utility with many generation stations.

The cost per BTU of oil is twice that of natural gas.  The gas combined cycle power turbine plants are over 60% efficient, the highest of any fuel choice.

How much are you going to spending building new oil fired power plants versus natural gas?

[Bigun]

Coal becomes more expensive due to regulations.  You own an electric utility with many generation stations.

The cost per BTU of oil is twice that of natural gas.  The gas combined cycle power turbine plants are over 60% efficient, the highest of any fuel choice.

How much are you going to spending building new oil fired power plants versus natural gas?

I understand all that and if all of the previously coal fueled plants move to natural gas that puts upward price pressure on natural gas I would think!

[thackney]

I understand all that and if all of the previously coal fueled plants move to natural gas that puts upward price pressure on natural gas I would think!

It has, but with hydro frac and directional drilling in shale formations, the supply capacity growth has outpaced the increased demand growth, combined with a mild winter.



Working natural gas inventories in storage ended the winter withdrawal season at 2,478 billion cubic feet (Bcf), slightly above the previous record high for the end of March set in 2012. The winter heating season was characterized by warmer-than-normal temperatures, continued high production volumes, and low natural gas prices. Looking forward to the summer, EIA projects record-high levels of consumption of natural gas for power generation.



More at:
http://www.eia.gov/forecasts/steo/report/natgas.cfm