North America gas long-term outlook H2 2019 highlights: Capital discipline leads to a higher price floor

Tight oil continues to have a significant impact on natural gas markets as associated gas production continues to take market share away from dry gas producers, particularly in the Haynesville and Northeast region. The trend of tight oil production’s steep growth trajectory in the short-term is continued in our H2 outlook. However, the overall volume has fallen compared to our last update. We still expect tight oil to peak post-2025, at nearly 13 million bbls/d but roughly 500 kbd less compared to H1. The year of highest annual growth is 2022 at over 800 kbd, nearly halved from our H1 outlook. Despite a downward revision to Lower 48 tight oil production, associated gas is higher once again in the outlook, with the exception of the short-term period (2020-2021). We’ve upgraded associated gas production by an average of 2.2 over the forecast period. Similar to tight oil, associated gas production plateaus in the mid-2020s.