American Oil and Gas Reporter - December 2022 - 80

EIA: Winter Gas Will Top $6 An MMBtu
WASHINGTON-The U.S. Energy
Information Administration notes that its
November Short-Term Energy Outlook
forecasts that natural gas spot prices at
the U.S. benchmark Henry Hub will average
$6.09 an MMBtu this winter (November
2022-March 2023), the highest
real price since winter 2009-10. " Our
forecast reflects natural gas storage levels
that are 4% below average heading into
winter withdrawal season and more demand
for liquefied natural gas as the
Freeport LNG facility comes back on
line, " EIA says. " After the winter, we expect
the Henry Hub price to decline in
2023 as production growth outpaces both
domestic consumption and LNG exports. "
Henry Hub natural gas spot prices
reached a peak of $8.80/MMBtu in August,
EIA observes, with prices declining to
average $5.66/MMBtu in October following
a period of strong dry natural gas
production and several consecutive weeks
of relatively large injections into natural
gas storage. Moreover, the administration
says, the high volumes of natural gas injections
into underground storage in September
and October shrank the storage
deficit to the five-year (2017-21) average
from 11% at the end of August to 4% as
of Oct. 28.
" Despite lower Henry Hub spot prices
since August, we expect natural gas prices
to rise this winter as a result of seasonal
demand for natural gas in space heating,
which typically peaks in January and February, "
EIA predicts. " We expect that
higher demand for LNG exports-particularly
in the Northern Hemisphere-will
also increase natural gas prices. We expect
demand for natural gas at LNG export facilities
to increase when the Freeport LNG
terminal in Texas resumes partial operations
in November, after it paused operations
in June following a fire. "
The administration also observes that
U.S. dry natural gas production has been
increasing throughout 2022 and has averaged
more than 98 billion cubic feet a
day every month since June. " We expect
dry natural gas production to continue
to grow, averaging 99.4 Bcf/d this winter
and 99.7 Bcf/d in 2023, " EIA concludes.
" We forecast natural gas production to
continue to grow, averaging 99.4 Bcf/d
this winter and 99.7 Bcf/d in 2023. We
forecast natural gas prices at the Henry
Hub will begin to decline in the spring
of 2023 as production growth continues
and winter demand for heating subsides.
For 2023, we forecast the annual Henry
Hub price to average $5.46/MMBtu for
the year. "
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TIPRO: Industry Employment Still Up
AUSTIN, TX.-Citing figures released
in November from the U.S. Bureau of
Labor Statistics, the Texas Independent
Producers and Royalty Owners Association
observes that new employment statistics
demonstrate continued growth in monthly
employment for the Texas upstream oil
and natural gas sector. According to
TIPRO's analysis, direct Texas upstream
employment for October 2022 totaled
207,000, an increase of 2,800 jobs from
revised September employment numbers.
Texas upstream employment in October
2022 represented the addition of 36,500
positions compared with October 2021,
including an increase of 8,100 in oil and
natural gas extraction and 28,400 jobs in
the services sector.
TIPRO points to strong job posting
data for upstream, midstream and downstream
sectors. According to the association,
there were 11,904 active unique
jobs postings for the Texas oil and natural
gas industry in October, including 3,742
new job postings added in the month.
Among the 14 specific industry sectors
TIPRO uses to define the Texas oil
and natural gas industry, support activities
for oil and gas operations continued to
dominate the rankings for unique job
listings in October with 3,823 postings,
followed by crude petroleum extraction
(1,573), and Petroleum Refineries
(1,143), indicating a continued emphasis
on increasing exploration and production
activities in the state. The leading three
cities by total unique oil and natural
80 THE AMERICAN OIL & GAS REPORTER
gas job postings were Houston (4,582),
Midland (1,043) and Odessa (564),
TIPRO details.
The top three companies ranked by
unique job postings in October were John
Wood Group with 820 positions, Baker
Hughes (591) and KBR (468), according
to TIPRO's analysis. Of the top 10 companies
listed by unique job postings last
month, six companies were in the services
sector, followed by two companies in oil
and natural gas extraction and two midstream
companies.
Top posted industry occupations for
October included heavy tractor-trailer
truck drivers (589), managers (342) and
maintenance and repair workers (245).
Top qualifications for unique job postings
included Commercial Driver's License
(470), CDL Class A License (368) and
Tanker Endorsement (157). When analyzing
education requirements for unique
industry job postings, TIPRO reports that
44% required a bachelor's degree, 34% a
high school diploma or equivalent, and
23% listed no education requirement as
part of the criteria.
TIPRO also highlights data released
from the Texas comptroller's office in
November that shows production taxes
paid by the oil and natural gas industry
to the state of Texas generated close to
$1 billion in tax revenue in October. According
to the comptroller's data, in October,
Texas oil producers paid $544 million
in production taxes, up 31% from
October 2021. Natural gas producers,
meanwhile, paid $410 million in state
taxes, up 59% from October 2021.
TIPRO goes on to report that oil and
gas production is anticipated to continue
to grow, and cites U.S. Energy Information
Administration projections that
show Permian Basin oil output will hit
a record 5.499 million barrels a day in
December. In South Texas' Eagle Ford
Shale, oil output is on pace to rise
14,000 bbl/d to total 1.237 MMbbl/d.
Overall, TIPRO notes that EIA projections
show U.S. crude oil production
will climb 91,000 bbl/d and top 9.191
MMbbl/d in December.
Meanwhile, TIPRO says EIA predicts
Permian Basin natural gas production
will rise 125 million cubic feet a day and
hit record highs in December at 21.3
billion cubic feet a day. Natural gas output
in the Eagle Ford Shale also is forecasted
to reach 7.390 Bcf/d in December, up 79
MMcf/d from November levels. Altogether,
EIA forecasts U.S. natural gas
production will grow to 95.7 bcf/d before
year's end.
" The Texas oil and natural gas industry
continues to provide unmatched
support for the state economy and our
nation's energy security, " assesses TIPRO
President Ed Longanecker. " Energy produced
in Texas has also helped our European
allies in a time of crisis. State
and federal policies should reflect the
need for reliable energy and growing
global demand for oil and natural gas. "
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American Oil and Gas Reporter - December 2022

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