Breaking through another psychological barrier, US natural gas prices fell to $2.99/thousand cubic feet in futures trading this morning. That’s the lowest price in more than two years and light years away from highs of around $14/thousand cubic feet in 2005 and nearly $12/thousand cubic feet in 2008.
The explosion in shale gas production is the reason for the decline, and it now appears that drillers are cutting back, with rig counts down -12% in 2011. But there are still more than 800 rigs going after natural gas and until that number drops even further, prices will remain low.
Working against a drop in the rig count are lease terms that require producers to develop the lease quickly or lose the rights. Producers are caught between the rock of low prices and the hard place of having to drill to maintain their right to the gas. Look for prices to remain low throughout next year.
Essential Tips for Investing: Sponsored
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
