The US shale boom has pushed natural gas markets below $2 per million British thermal units for the first time in a decade as new supplies overwhelm consumption.
The price is now almost 90 per cent below the all-time high of $15.78 per mBtu set in 2005, and a fraction of oil on an energy-equivalent basis. US gas costs far less than supplies in Asia and Europe, as limited export capacity has penned most of the hard-to-ship fuel inside domestic borders.
One source of fresh short-term demand may come from power plants switching from coal to gas. However, “right now we don’t believe power can generate enough demand to limit storage from approaching capacity in the fall”, said Logan Reese, manager of quantitative analysis at Bentek Energy.
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