Haynesville Shale
I listened to a commodities analyst a couple of weeks ago who talked about the "new potential low" for Nat Gas. Some time ago they were saying that $4 would shut down a lot of producers as that was around cost to produce an MCF into inventory.
Then they went on to say that $3.50 would be the low that would cause producers to turn off the taps. Then I heard this analyst saying that Haynesville Shale gas was able to be produced at $3 MCF and so potentially, based on inventories and declining demand, we could see Nat Gas move close to $3 before there would be a reversal.
The good news of all that was that if Nat Gas gets there then we will a huge reversal in price as there really would be some major shut downs and Gas buyers know that production isn't as easy as going over their and hitting the START button. So contango would catch major spreads on about 3 or 4 months of futures contracts.
I'm not suggesting that I know ANY OF THIS FOR A FACT... merely parroting the conversation as best I can recollect it.
Curious if anyone here is thinking along these lines as well.