Furthermore, the U.S. could begin exporting excess natural gas to foreign markets, notably in Mexico where the country is constructing gas generators to meet rising electricity needs and faces limited additions to its gas production.
The demand, though, will be met by rising supply due to low-cost extraction from areas like Marcellus, Utica, and various oil-rich projects.
The analysts warn that should oil prices remain lower than-expected, U.S. oil projects will be delayed, which could lead to further cost pressures, a negative for natural gas markets. If infrastructure does not meet the new supply, activity could slow and contribut to higher gas prices. Greater industry consolidation could also lead to higher costs for producers and higher gas prices. Improved technologies to drilling would lower costs and gas prices going forward. Lastly, a weaker economy could lead to diminished drilling activity and higher gas prices.
For more information on the natgas market, visit our natural gas category.
Max Chen contributed to this article.