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Cold Weather Disruptions Lead to Lower US Natural Gas Production in January 2024
03/05/2024![Cold-Weather-Disruptions-Lead-to-Lower-US-Natural-Gas-Production-in-January-2024](https://images2.rextag.com/public/blog/236Blog_Cold Weather Leads to Lower US Natural Gas Production (Jan 2024).png)
- The U.S. became the world’s biggest LNG supplier in 2023, ahead of Australia and Qatar
- US dry natural gas production dropped to 102 bcfd (Jan 2024) from 106 bcfd (Dec 2023)
- By 2025, production is anticipated to climb over 106 Bcf/d
In January, US natural gas production dropped to 102 billion cubic feet per day (Bcf/d) from December's record of 106 Bcf/d due to bad weather. The Energy Information Administration (EIA) expects it to recover soon, hitting 105 Bcf/d by March. The EIA's outlook for 2024 predicts an average production of about 104 Bcf/d, slightly down from the earlier forecast of 105 Bcf/d. By 2025, production is anticipated to climb over 106 Bcf/d.
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"We forecast that mild weather for the remainder of 1Q24 will keep the average Henry Hub spot price near $2.40/mmBtu during February and March. But volatility could return if severely cold weather emerges, even for a short period," the EIA said.
Last month saw a record consumption of 118 Bcf/d in the US, mainly because of high demand from the electricity sector. Even with the expected milder weather in February and March, the EIA predicts a 5% increase in first-quarter consumption compared to the warm early months of 2023.
As for the natural gas market, futures for March delivery dropped by 2.6% to $2.028 per million British thermal units. This decline comes as the market braces for potential colder weather forecasts later in the month, closely watching the $2 price level.
Supply and Demand
In February, gas production in the US Lower 48 states went up to an average of 105.4 billion cubic feet per day (bcfd) from 102.1 bcfd in January. This increase still didn't beat December's record of 106.3 bcfd.
Weather reports expect warmer temperatures in the Lower 48 states until February 13, turning to typical cold levels from February 15 to 21. Due to this expected cooler weather, gas demand in the US, including exports, is predicted to rise from 121.8 bcfd this week to 124.6 bcfd next week. This update changes earlier predictions, lowering this week's demand forecast and raising next week's.
Gas supply to major US LNG export facilities dropped to 13.6 bcfd in February from 13.9 bcfd in January, not reaching December's high of 14.7 bcfd. Analysts believe LNG feedgas volumes won't hit record levels again until the Freeport LNG facility is fully operational, expected by mid- to late February.
Drop in Renewables
The EIA predicts more solar and wind energy in 2024. Solar could go up by 43% and wind by 6%. But, they're expecting a bit less growth in renewable energy for 2025 due to fewer new projects recently.
Growth in energy from fossil fuels like natural gas and coal is slowing down. Natural gas growth is expected to be 2% in 2024, down from 7% in 2023. Coal use is likely to drop by 8%.
Hydropower is expected to rise by 7% in 2024 thanks to more water availability.
In Texas, especially with the Electric Reliability Council of Texas (ERCOT), there's a big expected jump in solar power by 90% and wind by 8% in 2024.
The Midwest might see a big drop in coal energy in 2024, but more natural gas energy should help balance things out. This shows how energy is changing, with less coal and more natural gas and renewables.
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Talos Energy and Repsol Join Forces in Gulf Exploration JV
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/203Blog_Talos Energy and Repsol joint venture in the Gulf of Mexico.png)
alos Energy and Repsol have formed a partnership, each owning 50-50, to reexamine seismic data in a shared area to identify where to drill in the coming years. Tim Duncan, the CEO of Talos, sees this as a strategic use of land they acquired from EnVen Energy Corp to enhance its value. Talos Energy is putting to use the land they bought from EnVen Energy Corp for $1.1 billion. CEO Tim Duncan talked about this on November 7, explaining that it's a smart move because the government has delayed a big decision on new ocean drilling areas. By teaming up with Repsol, Talos plans to work on the land they already have, about 100,000 acres, so they don't have to wait for new permits.
Welcome 2024: A Look Back at 2023 Top Oil and Gas Sector Deals
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/Post 218 (blog) Welcome 2024_ A Look Back at 2023 Top Oil and Gas Sector Deals.png)
2023 was quite a year for the oil and gas sector, with some big deals making the news. In the US, giants like ExxonMobil and Chevron grabbed headlines with their plans to acquire companies like Pioneer and Hess. Internationally, ADNOC wasn't left behind, expanding its reach as well. As we ring in the new year, let's recap the biggest oil and gas deals of 2023.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/297_Blog_Keystone XL Pipeline Controversy and Wildlife Disaster From Trump's Green Light to Biden's Red Light on the 15 Billion Project.jpg)
The pipeline industry in the USA faced and still faces a range of regulatory challenges, including permitting delays, environmental requirements, and public opposition to pipeline projects. In recent years, pipeline projects like the Keystone XL and Dakota Access pipelines had legal and regulatory obstacles that delayed or canceled their construction. Keystone XL Pipeline, proposed by TransCanada in 2008, aimed to transport crude oil from Canada (around Calgary and Edmonton) to refineries on the Gulf Coast (Port Arthur). The project faced opposition from environmental groups and indigenous communities, who argued that it would contribute to climate change and pose a risk to water resources. In 2015, President Obama rejected the project, citing concerns about its environmental impact. However, in 2017, President Trump revived the project, leading to further legal challenges. In June 2021, U.S. President Joe Biden officially canceled the project on his first day in office.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/282_Blog_Renewable Natural Gas How RNG Changes the Industry.jpg)
The renewable natural gas (RNG) industry in the United States is showing promising signs of growth. As of 2019, the U.S. consumed 261 billion cubic feet (BCF) of RNG, primarily utilized by independent power producers, electric utilities, and various commercial and industrial entities. However, this figure represents only a small fraction of its potential. Research indicates that the U.S. could theoretically produce up to 2,200 BCF of RNG through anaerobic digestion alone, which would equate to about 11% of daily national natural gas consumption.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/295_Blog_Renewable Efforts Lag as Global Oil and Gas Demand Continues to Rise.jpg)
Recently, the progress toward an energy transition is hitting a snag. Sales of electric vehicles are decelerating, and the growth in wind and solar power needs to be keeping pace with expectations. To make matters more challenging, electricity prices are climbing when they were expected to fall. Amidst these setbacks, the oil and gas sectors are proving resilient. According to BP's latest energy outlook, not only are these energy mainstays here to stay, but their demand is expected to remain relatively high even after reaching a peak. Interestingly, BP forecasts that oil demand will reach its zenith next year, marking a critical moment in energy consumption trends. This isn't the first time BP has projected a peak in oil demand. Back in 2019, their review anticipated a decline in demand growth, but the prediction fell flat. Instead, oil demand surged to unprecedented levels following the end of the global pandemic lockdowns, defying previous forecasts and underscoring the enduring dominance of traditional energy sources in the global market.