While market participants are captivated by the massive price swings in the oil market, natural gas prices are also trading at multi-year lows as the industry faces many of the same challenges. Along with the shale revolution for oil, came shale gas which has also been discovered in abundance via horizontal drilling. Prices for gas have not proved nearly as volatile but the conditions remain the same with oversupply reaching a critical mass. The rig count has not dropped as steeply as witnessed in the oil market, however, the number of horizontal drill rigs is down 25% from 2014 highs. With most companies failing to break even at these prices, they have begun to increase output, wreaking havoc on prices as seasonal heating needs dissipate. Gas prices have been forecast by some to reach $2/mmBTU if production is maintained.
Natural Gas Prices Bleed Lower
Daily Analysis - 24/03/2015