Is Natural Gas Too Cheap to Drill?

The price of natural gas is right around $2 and even traded below that level for the first time in a decade on April 11. Since peaking at $10 per 1,000 cubic feet in June 2008, natural gas prices have steadily declined as new horizontal fracking techniques have unlocked massive amounts of shale gas. As prices have declined, so has the number of operating gas rigs. There were only 624 operating in the U.S. as of April 13, the fewest since April 2002, according to Baker Hughes, a Houston oil- and gas-services company. Gas rigs have been disappearing particularly fast since late October, the last time prices were above $4.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.