The US' natural gas production is expected to decrease by 5% this year due to weakening economic outlook from the impact of the novel coronavirus (COVID-19), according to a statement by the country's Energy Information Administration (EIA).
The EIA said Friday it estimates marketed natural gas production in US to average 94.3 billion cubic feet (2.67 billion cubic meters) per day in 2020, down from 99.2 billion cubic feet (2.81 billion cubic meters) in 2019.
"Before the economic contraction caused by mitigation efforts in response to COVID-19, EIA expected natural gas production would flatten in 2020 because of the oversupplied market created as natural gas production growth has outpaced demand growth," the statement said.
Due to the rise in drilling in shale and tight oil formations, the US set annual natural gas production records in 2018 and 2019, but this increase in gas output led to higher volumes of gas storage and a decline in natural gas prices.
"Declines in crude oil and natural gas prices in March and April have led producers to announce plans to further reduce capital spending and drilling levels, as well as curtail production from some existing wells," the statement said.
The EIA noted that it expects natural gas prices to increase beginning from the third quarter of this year, driven by a rise in industrial demand as business activities resume after quarantine measures soften against COVID-19.
By Ovunc Kutlu