RE:RE:RE:RE:futures expiryHi Huntingman, In answer to your question it all depends on what type of drilling and where they are drilling for example dry land rigs still make a profit @ $1.50 yet deep water wells are much higher, deep water wells are used more for oli as in the producing region and NG is a by product so cheaper cost of Ng doesnt mean they will shut down the wells.
Although NG price has been dropping heavily, the supply output is actually very strong, last week set a new all time record with supply hitting 76BCF per day, that was from reduced wells!!! From recent DD i can see another 3BCF per day coming online next week once upgrades in pipelines are complete, most of the year dedicated NG wells were running at a choke of 32/64 due to capacity restrictions, so even at lower prices and lower well counts NG supply will remain very very high,
Going forward, if you compare last weeks chart with the same week as 2012, on the 19th Dec. 2012 NG closed at $3.41, 19th Dec. 2014 we closed at $3.44 so very close, 2 big differences are the huge gap in oil prices from 2012, and at end of withdrawals in 2012/2013 season storage was at 2450, wheras at the end of this season, WX permitting, we should stand somewhere around 1750.
Take from this what you will, bashers feel free to bash my DD
Good luck