RE:How can with 121 rigs count of lng we are still oversupply..Those rigs were awefully busy between 2008 to 2014 and drilled a heck of a lot of wells, these are horizontal wells that fracked a lot of underground per well compared to conventional or even directional wells. A lot of these rigs were financed by easy money low interest money from over-enthusiatic bankers.
Now the owners and producers of the wells, still have to pay the bank loans and have no choice but to keep connecting the backlog of these expensive wells to the pipelines in order to pay the loans at any price they can get for ng on the market.
They cannot stop over-supplying the market and the mild winter just keeps on lowering demand from consumers and causing a glut.
No executive is going to be the one to say, i stop supplying and stop paying the banker and go bankrupt, when they have the cash flow to keep paying the bank with the greater volume of gas they can get out to pipes per well.
The real problem you cannot see is "what the heck are they even doing still drilling 121 new horizontal wells, when there should be absolutely none at work ?"
The answer is this, if you have a licence to drill on land, you have to be actively doing the process of drilling activities or you lose the licence to drill that property. So the glut continues to be made even larger with these highly efficient drilling techniques that require less rigs per property to reach into and frack the gas strata.