"Matching November's strong uptick, Pennsylvania once again posted the largest sequential increase with production of 0.4 Bcf/d for the second-straight month. Despite continued curtailments in the region given low natural gas prices, significant new takeaway capacity came online in late 2015," wrote the analysts in a recent report. "We now estimate Marcellus natural gas production increased by 2.0 Bcf/d and that Utica volumes were up 1.3 Bcf/d on average, in 2015 due to additional pipeline capacity coming online in Q4'15."
The analysts noted that onshore gas production fell in December to 77.7 Bcf/d, a drop of 0.5 Bcf/d from November, but it was 1.6 Bcf per day higher than the year earlier.
U.S. inventories now stand at 2.536 trillion cubic feet, 45 percent higher than last year's levels and 35.6 percent above the five-year average, according to the EIA weekly report.
In its latest monthly report, EIA said production was at 91.1 billion cubic feet per day in December, down from a high of 91.7 billion cubic feet in September.
Walker said that by Bentek's measure, which differs from the EIA, there was one day last month when dry gas production actually reached an all-time high.
Bentek estimates dry gas production in the lower 48 U.S. states hit a record Feb.19 of 73.83 Bcf/d. February dry gas production averaged 73.23 Bcf/d, a monthly average that is higher than all but 13 days ever. The previous monthly record occurred in September 2015, at an average 72.62 Bcf/d.
There could be some pickup in gas prices in the next several months, but a big move higher is not immediately expected, analysts said.
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"The jet stream is being pushed up north by El Nino. That would allow some hot weather to come our way in late spring. There's been so many cutbacks in rigs, and so much displaced coal, the balance sheet for natural gas might show some signs of improvement," said John Kilduff, partner with Again Capital.