The price of natural gas increased significantly the last couple of days. And it’s not just because of a weaker dollar. The US natural gas rig count fell another 3% last week to 857, more than 46% below their September peak. It is now at a number that threatens future supply levels.
The lower number of rigs for exploration and production have led EIA to predict US natural gas production will fall more than 5% in the 4th quarter. As a result, analysts and investors are starting to weigh the supply drop more heavily than the recessionary lower demand and deciding sub-$4 natural gas is a steal long-term. That attitude has sent prices from the upper $3.60s to today’s $4.20s in NY futures trading. Therefore, we may have seen the bottom for natural gas prices.
It all depends of course on how far down the recession takes economic activity and demand. Inventories fell 50% less than normal last week and Spring warmth promises to reduce natural gas demand within a few weeks.
I’ll keep you updated on natural gas supply and demand, and how it affects our country’s greenhouse gas emissions in the months and years ahead.
Enjoy March Madness y’all! 
Tags: demand, Natural Gas, recession, rig count, supply