US natural gas and NGL production continues to impress, recording strong growth so far this year as US drillers increasingly target wet plays in the Northeastern plays of Marcellus and Utica.

  • Improvements in US natural gas drilling techniques (including higher spud per rig levels, more stages per well and longer lateral lengths) are offsetting significantly lower rigs numbers and depressed Henry Hub prices.
  • In fact, according to the EIA, US dry natural gas production increased by 8% y-o-y over the Jan-May period while combined LPG and ethane production increased by 9% or 275,000 b/d y-o-y over the same period (see chart), with all of the growth coming from the gas side rather than refinery output.
  • For further information and analysis of gasoline, naphtha, LPG, and petrochemical markets please enquire about this month’s Top of the Barrel report.