Yesterday the Department of Energy,'s EIA released their EIA-914 Monthly Natural Gas Gross Production report. Fist a little background: prior to Jan-05, the EIA had published estimates of natural gas production based on data supplied by or collected from individual State agencies and the Minerals Management Service. Because these production estimates were not considered sufficiently timely nor accurate to meet customer needs the EIA instituted this monthly survey, which collects production data directly from well operators.
This month's 914 report was modestly bullish, showing continental U.S. gas production to be approximately -1.4 bcf per day (a negative number is bad, positive is good for gas prices) out of balance (in from nearly -3.5bcfpd during massive Aug-09 production builds)
However, it is unclear whether the sequential decline is driven by either production shut-ins (operators such as CHK and ECA stated their voluntary shut-in volumes, and it is likely that others followed suit as spot gas prices declined to sub $2/mcfe in early Sep-09, and only gradually improved to ~$3.5/mcfe by the end of the month) or natural declines in production capacity (TPH had estimated 0.5 bcf/day of natural wellhead declines back in late Nov-09).
Net-net, the 914 data seems inconclusive and ~1.5 bcf/day of production shut-ins seems statistically unrealistic based upon historical trends. Additionally, the latent winter weather is not helping to clarify the demand side of the situation - I will be watching the weekly storage data tomorrow morning for implied supply-demand, which will no longer be disguised by full storage effects.
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