Oil & Gas Pro

Increasing oil production to weigh on natural gas price

Natural gas outlook turns bearish on crude gains

Story by Mella McEwen  msn.com

A period expected to be strong for natural gas has been upended by the conflict and its impact on global crude markets.

The dramatic reversal in crude oil prices is likely to bring more associated gas supply to market and has tempered the outlook for natural gas through 2030, according to East Daley Analytics.

East Daley analysts have locked in assumptions that elevated crude prices will drive more drilling in liquids-focused basins and increase associated gas growth, lowering their natural gas price forecast.

The largest price revisions in East Daley’s Macro Supply & Demand report begin in early 2027, running through late 2028 when accelerating associated gas production growth pushes the forecast roughly 60 cents per MMBtu lower than the prior outlook. Under this revision, Henry Hub prices are not expected to rise above $4.50 until the winter of 2028-29.

In East Daley’s new outlook through 2030, the Permian Basin is forecast to add nearly 1 billion cubic feet per day of new supply, while growth from the Eagle Ford, ArkLaTex and Northeast helps balance the gas market at the margin. Increased associated gas will displace growth from higher-cost basins as Anadarko production is expected to fall by about 750 million cubic feet per day and the Rockies by 250 million cubic feet per day.

East Daley calls crude oil the other side of the coin. West Texas Intermediate is now expected to average $84 per barrel in 2026 before gradually trending down to $67 by 2030. Even so, analysts note those prices are well above breakevens in the Permian and Eagle Ford, sustaining an incentive for oil-directed drilling.

East Daley now projects crude production will grow 196,000 barrels a day, or 2.9%, through 2026, with cumulative growth of more than 350,000 barrels a day through December 2030. Bakken growth also accelerates, rising 51,000 barrels a day, or 4.1%, by the end of 2026 and 86,000 barrels a day, or 6.7%, in 2027.

In the Permian, takeaway capacity is the most likely constraint to growth, according to analysts. Current egress data in the company’s Crude Hub Model shows roughly 267,000 barrels per day of available capacity to Corpus Christi, 278,000 barrels a day to Houston, and 636,000 barrels a day to Cushing. With higher crude oil prices, capacity into Corpus Christi and Houston is expected to tighten quickly.

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landownerPermalink Reply by Dale Walton on April 16, 2026 at 3:41

Basic math.  Oil brings associated NG with it.  But I have not heard of a lot of operators picking up rigs to capitalize on this short term price increase.  

Permalink Reply by Hale Yayuh on April 20, 2026 at 3:06

I tell ya, we just can't win. This has been going on for over 15 years with very few short periods of increased nat gas prices. Every time I (and experts who write articles) think we are entering a bullish multi-year period for nat gas, something happens and it craters before it even happens. I have to wonder how these dry nat gas companies, such as is the Haynesville, will fare for the next few years. Including the western Haynesville. I mean, at less than $3? How is this going to work!

I admit that the war in Iran and all that infrastructure destruction that occurred relative to nat gas and the price did not rise significantly... and now the price forecast is BEARish? Sheesh.

Over 15 years and counting.


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on April 20, 2026 at 3:13

Hale, for better or worse Haynesville gas is tied to LNG demand.  The short term looks positive as long as there is less supply coming out of Qatar.  The long term question is much more iffy.  If this crisis for LNG and oil accelerates the move away from fossil fuels by countries that were major LNG importers, we could see the greatest instance of stranded assets in the history of oil and gas.  And less demand means lower prices for the remainder of Haynesville shale production life.  As more data centers come on line and use electricity generated by natural gas, the domestic price may stabilize but we may never see the days of $5 to $6 gas again.

Permalink Reply by Hale Yayuh on April 20, 2026 at 3:29

Yep, Skip, you're spot on. Agree on all. If we ever again see $4 to $5 for a sustained period, that would be wonderful, lol.

Permalink Reply by Jesse Joyner on April 20, 2026 at 8:48

Hale Y. -- check the NG pricing on your last two royalty statements. (Note: Unsure if this applies to mineral owners in Texas.) For some Bossier Parish CUL royalty owners with BPX in NW LA, the NG price did top $5 on NG production "paid" for March and April (which means the physical production was months back due to operator bookkeeping). But regretfully, for the upcoming months, future NG prices have dropped below $3.

Hence, you're right, Hale. They get us coming and going. The deductions are pushing 25% if one doesn't have a Free Royalty Clause. I mean, even with a war going on, the future's price for NG is dismal . . . until later in the fall.  


Oil & Gas ProPermalink Reply by Rock Man on April 22, 2026 at 8:20

Semi related comment

Permian Basin WAHA gas hit a new low of NEGATIVE $9.53 MMBTU today

The bottleneck from the Permian continues!


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on April 22, 2026 at 13:45

The more oil drilling, the more associated gas, the more gas trying to find a way to market.  Once the bottleneck is relieved, more gas to LNG on the coast.

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