The Evolution of US Natural Gas Prices

US natural gas prices have hit historic lows due to consecutive warm winters leading to weakened demand. Despite strong demand historically, US shale production has exceeded supply which caused the dislocation in prices for the past decade. However, a shift is expected as shale growth has slowed down significantly. The stagnation in key shale basins like Marcellus and Hanesville indicates a potential market tightening, indicating a likely increase in prices. Even if production picks up in the future, the current low prices do not justify drilling operations in expensive shale wells, causing a substantial slowdown in drilling activities.