• 3 minutes Looming European Gas Crisis in Winter and North African Factor - a must read by Cyril Widdershoven
  • 7 minutes "Biden Targets Another US Pipeline For Shutdown After 'Begging' Saudis For More Oil" - Zero Hedge Monday Nov 8th
  • 12 minutes "UN-Backed Banker Alliance Announces “Green” Plan to Transform the Global Financial System" by Whitney Webb
  • 3 hours Microbes can provide sustainable hydrocarbons for the petrochemical industry
  • 9 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 7 hours Hunter Biden Helped China Gain Control of Cobalt Mines in Africa
  • 9 hours CO2 Electrolysis to CO (Carbon Monoxide) and then to Graphite
  • 5 days Building A $2 Billion Subsea Solar Power Cable From Chile To China
  • 3 days Is anything ever sold at break-even ? There is a 100% markup on lipstick but Kuwait can't break-even.
  • 6 hours NordStream2
  • 4 days Modest drop in oil price: SPRs vs US crude inventory build
  • 4 days 2019 - Attack on Saudi Oil Facilities.
  • 4 days Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 6 days Ukrainian Maidan after 8 years
  • 6 days Peak oil - demand vs production

Shale Gas Cuts into Natural Gas Trade

The boom in shale gas production over the last decade has eaten away at natural gas imports. New data released by the Energy Information Administration shows that the value of U.S. imports of natural gas hit their lowest levels in over 20 years. The U.S. imports natural gas largely through pipelines from Canada, but with such an abundance of domestic gas production, imports have dropped precipitously since 2005.

Yesterday, EIA released data showing that tight oil production has led to a significant drop in oil imports. Today’s data shows a similar picture for natural gas. But there are a few interesting differences between the two fuels. As EIA notes, the shale gas bonanza started well ahead of the boom in tight oil production. With both the volume and price declining for natural gas, the overall value of U.S. trade in natural gas dropped dramatically, reaching its lowest level in 2012 since 1995.

Related Article: The Real Bullish News For U.S. Natural Gas

Unlike crude oil however, natural gas imports have declined at the same time as a significant rise in consumption. As natural gas production soared, prices declined, allowing for a shift in consumption patterns. With oil, production climbed, but aside from the financial crisis, prices have not dropped from their levels a decade ago.

The reason for that is that oil trades on a global market, whereas natural gas trades regionally. Higher natural gas production in one country cannot easily be traded to another country. So, the greater abundance of U.S. gas led to sharply lower prices. Opening up the U.S. market to exports of LNG could change that equation – allowing product to reach global markets would contribute to more liquid supply but also increase the linkages between domestic prices with global supply and demand. For the time being, EIA’s data shows that greater domestic production of natural gas is improving the U.S.’s energy trade balance.

By Charles Kennedy of Oilprice.com



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News