Natural Gas Prices Finally Jump

As predicted, the Department of Energy reported the natural gas supply was lower than originally thought and that led to a rise in futures. However, the supply is still above average levels at 5.5 percent higher than one year ago. Also, the number of gas drilling rigs has dropped by 17 rigs. This supports speculation that oilfield companies were doing less exploration and production.

But the number of rigs remains much higher than one year ago. In July 2009, the rig count was 665. The current rig count stands at 956. Also, in one week, the gas demand from power generators went up to 1 billion cubic feet per day.

Oil and gas production companies continue to struggle with finding a profitable price point due to price volatility.