Wednesday, December 2, 2009

Production Finally Declines

It looks like the big increase in the Henry Hub spot price on Monday (+30%) was the result of the Energy Information Agency's monthly production release, which showed a production decline of 2% in the Lower 48 in September 2009.  All states saw production declines except for Louisiana, because of the Haynesville Shale (link to report). 

Analysts have been waiting...and waiting...and waiting for production declines to follow the dramatic decrease in rig counts.  They've been foiled to this point by high producing shale wells that just keep adding to production. 

Here's an article on this report from the Wall Street Journal, which frustratingly published a photograph of an oil well to accompany an article about natural gas (I've already vented about that kind of thing from the WSJ this week.)

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