The Rising Influence of Rising Affluence

[jbog]

End in Sight for U.S. Natural-Gas Glut

That surplus could be erased by a single frigid winter, while supply and demand suggest a balanced market ahead. Onshore natural-gas production fell in June for the fourth consecutive month, according to the U.S. Energy Information Administration. The number of rotary rigs drilling for gas in North America touched an all-time low last week of 81, according to Baker-Hughes. Eight years ago this week, it had reached an all-time high of 1,606.


At the same time, the historic cheapness of gas has stoked demand for it as a power generation fuel. Two decades ago, the U.S. electricity sector used over 4½ times as much coal by energy value as natural gas. Last year, it was 1.4 times and the shift has continued. The EIA said in March that this year should see gas use overtake coal for the first time ever. U.S. power producers consumed a seasonal record amount of gas in June, up 9% from a year earlier, while coal shipments by rail are down by over 25% year-to-date, according to the Association of American Railroads.

http://www.wsj.com/articles/end-in-sight-for-u-s-natural-gas-glut-1472830203