To combat lower energy prices, oil and gas drillers are idling rigs at the fastest pace since 2002… which may cause prices to double. The number of rigs in the U.S. has fallen to 884 from a record 1,606 in September.
According to Bloomberg:
About 45 percent of U.S. rigs have been shut since September, which means fourth-quarter gas production will tumble 5.2 percent, faster than the 1.9 percent decline in use, the Energy Department forecast. Prices will rise to $7 per million British thermal units by January from $3.897 today on the New York Mercantile Exchange, according to a Bloomberg News survey of 20 analysts. The gain would be the largest since the first half of 2008.
When energy demand rebounds, the infrastructure won't be there to supply it, and prices will soar.
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