After years of booming production, US natural gas firms are scaling back after record low prices and huge surpluses.
Overproduction and a mild winter contributed to scaled back demand for natural gas in the US, and declining stock prices for producers.
Natural gas futures late last week lost 2.4 percent to just over $2 per 1,000 cubic feet - the lowest price in a decade, reported the Associated Press.
According to WTRF 7, many of the biggest natural gas producers in the US, like Chesapeake Energy, and Encana, have said that they will quickly decrease production.
“They’ve gotten way ahead of themselves, and winter got way ahead of them too,” said Jen Snyder, head of North American gas for the research firm Wood Mackenzie, reported the Associated Press.
“There hasn’t been enough demand to use up all the supply being pushed into the market.”
The drop in natural gas prices have been countered by a spike in oil prices.
Increased oil production is not helping the price of natural gas, as the latter is often a byproduct of the former.
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