Natural gas prices are falling near levels last seen in the 1990s, which could help spur the U.S. to develop more uses for the fuel, including transportation.
The collapse in natural gas prices to decade lows amid record supplies have changed the dynamic of the energy industry.
Natural gas is already displacing coal in power generation, driving coal’s share to the lowest level since the 1970s, and promises to drive it even lower. And there's more talk now that it could replace some gasoline in transportation.
But for now, natural gas is being overproduced across the country, as companies extract shale gas in 32 states and off shore. In just a few short years, the shale gas industry has turned the U.S. from a potential importer of natural gas to a potential major exporter .
This abundance of supply and an unusually warm winter combined to create a record amount of natural gas in storage for this time of year. The EIA reported Thursday that there is now 2.42 trillion cubic feet in storage, after an injection of 57 billion cubic feet in the past week.
The May futures contract fell to $2.165 per million BTUs Thursday morning.
"We saw a substantial injection, or increase in inventories. It's going to hasten the move below $2 and puts even $1.50 right now within the realm of possibility of being broken before Memorial Day," said John Kilduff of Again Capital.Page 1 of 4 | Next Page