According to this MarketWatch article, natural gas prices could go up in the near future.

There are a couple of key factors to look at.  First, gas storage is 11% lower than the five year average.  That number alone is not enough to drive prices up as it’s likely that continued production will fill the gap easily.  There are, after all, quite a few wells which have been drilled but haven’t been brought online, and I was reading some posts on Go Marcellus Shale by mineral owners who think that Chesapeake has been closing valves on wells just because it doesn’t want to produce lots of gas in a low market.

Second, drilling rig numbers have dropped off.  We’re down 46% from last year.  That’s a lot of drilling rigs idled in one year.  That means we’re not drilling as many new wells, regardless of increases in drilling efficiency.  As old wells’ production numbers drop, new wells will be brought online to replace them, but wells won’t be drilled to replace the wells that have been waiting to be brought online.

Natural gas demand is going up.  This is a long-term trend, not a short-term blip.  Coal fired power plants are being shuttered, and will be replaced by natural gas fired plants.  Pipelines are being built, and demand for natural gas to heat homes is going to increase.

Oil prices are also likely to start going up again, as a lot of the same factors are going to affect oil stockpiles and production in the U.S.

The future for natural gas prices may not be all shiny and rose-tinted yet, but it’s certainly not bleak.