U.S. Nat Gas Production Dip Does Little to Dent Glut

(MoneyWatch)  Natural gas production in the United States has finally dipped -- and the news has come not a moment too soon for energy companies that have grappled with low prices for months.

The Energy Information Administration reported Monday natural gas production in the lower 48 states fellby 1.39 billion cubic feet per day, or 2 percent, in September compared to August. Louisiana reported the only increase in production as drilling in the Haynesville shale continued, according to the EIA report. All other areas reported decreases in production due to a combination of plant maintenance, repairs and shut-ins due to low gas prices.

The sharp drop in U.S. drilling activity had little effect on gas production numbers, until now. The hope is that lower production numbers will trickle down and finally start to put a dent in the massive gas supply that is 11.8 percent higher than the same time last year. Working gas in storage was 3.83 billion cubic feet as of Nov. 20, up 2 bcf from the previous week, according to EIA's weekly natural gas storage report.

Its the glut of gas that folks are worried about. Although perhaps they're not worried enough. The number of rigs drilling for oil and gas in the U.S. in October was 1,044, up 35 rigs from the previous month, according to Baker Hughes monthly report. The U.S. rig count peaked at 1,606 rigs in September 2008 and fell sharply before bottoming out at 665 rigs in July 2009. Since then rig numbers have risen steadily.