the rest of the forecast period . As more new wells come online later in 2021 , new well production will exceed the decline in legacy wells , driving the increase in overall crude oil production after the first quarter of 2021 .
Associated natural gas production from oil-directed wells in the Permian Basin will fall because of lower West Texas Intermediate crude oil prices and reduced drilling activity in the first quarter of 2021 . Natural gas production from dry regions such as Appalachia depends on the Henry Hub price . EIA forecasts the Henry Hub price will increase from $ 2.00 per million British thermal units ( MMBtu ) in 2020 to $ 3.01 / MMBtu in 2021 and to $ 3.27 / MMBtu in 2022 , which will likely prompt an increase in Appalachia ’ s natural gas production . However , natural gas production in Appalachia may be limited by pipeline constraints in 2021 if the Mountain Valley Pipeline ( MVP ) is delayed . The MVP is scheduled to enter service in late 2021 , delivering natural gas from producing regions in northwestern West Virginia to southern Virginia . Natural gas takeaway capacity in the region is quickly filling up since the Atlantic Coast Pipeline was canceled in mid-2020 . Principal contributor : Naser Ameen ( See Figure 4 )
FIGURE 1
FIGURE 2
FIGURE 3
FIGURE 4
Source : U . S . Energy Information Administration , Monthly Energy Review and Short-Term Energy Outlook ( STEO )
12 FEBRUARY 2021 | FUEL OIL NEWS | www . fueloilnews . com