Cutbacks in US natural gas drilling and production and higher North American demand combined to decrease storage levels and raise prices above $4 per million BRU in the first quarter of 2013
Gas-directed drilling fell in 2012 through early 2013, and after natural gas prices hit all-time lows in early-2012, some producers cut back production while others focused on higher-priced liquids. Despite these shifts, natural gas supply continued to soar on associated gas production and lagged infrastructure completions. Meanwhile, demand improved as power generation and industrial usage increased 21 percent and 3 percent, respectively.
Although $4 NATGAS reflects a more-than 50 percent increase over 2012’s record lows, US natural gas prices are still very low compared to global markets. The shale boom has created a new reality of abundant US natural gas. Taking full advantage of this increased.