[Editor's note: A version of this story appears in the February 2021 issue of Oil and Gas Investor magazine.]

A warmer-than-usual U.S. winter has dragged on natural gas futures, but sub-$3 won’t last, according to forecasters. Asian demand has rebounded. Industrial demand has rebounded. And supply remains reduced by less oil-well associated gas production.

Near term, however, there’s still too much natgas, according to Rusty Braziel, executive chairman of energy-markets consulting firm RBN Energy LLC. “U.S. natural gas is now totally dependent on exports to balance supply and demand,” he wrote shortly after New Year’s Day.

As LNG exports “have recovered with a vengeance” and natgas prices “clawed their way back” to more than $2 in the second half of 2020, “the lesson was learned,” he wrote. “With Lower 48 production in the 90-plus Bcf/d range where it is today, without exports the U.S. market is vastly oversupplied and, if exports are curtailed, prices will respond accordingly.”

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