Gas pipelines threaten gas price in U.S.

Natural gas prices in the U.S. could be further depressed in coming months, as an array of new natural gas pipelines prepares to come online bringing shale gas to market along the East Coast, Bloomberg reports.

Around 1,000 natural gas wells have been started, but left unfinished thanks to a shortage of pipeline infrastructure to transport the gas.

However, several new pipelines from the Marcellus shale play in Pennsylvania, Ohio and West Virginia are scheduled to come online this fall, raising the potential for further oversupply of the already swamped market. The new pipelines could bring in as much as 2 billion cubic feet of gas per day.

"There are new pipelines coming up and more Marcellus gas is going to flood storage going into winter," Phil Flynn, senior market analyst at Price Futures Group, told Bloomberg. "Unless you get a really cold winter, prices are going to be in the $2 range."

Natural gas dipped below $2 per thousand cubic feet in April of this year, as a warm winter and surging unconventional natural gas production left the market heavily oversupplied.

According to Bloomberg, the latest bump in natural gas prices came only with the news that natural gas supplies are not expected to surpass the country's storage supplies in the near future.

Assessments of natural gas storage in the U.S. can be found in PennEnergy's Research area.


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