The U.S. will need to significantly reduce domestic oil production to prevent a protracted period of sub-$30 WTI, a level that leaves almost no producer profitable. Over the last 10 years, technology and access to capital have allowed for rapid growth in oil production as well as in associated gas volumes. Historic reductions in drilling rig counts suggest that this rationalization process is underway.
This will lead to a rebalancing of U.S. natural gas supply/demand dynamics. 2021 NYMEX pricing is already reflecting some of this effect. To rebalance the oil supply function, shut-ins will benefit gas producers. The ability of natural gas producers to hedge forward production at current 2021 levels results in substantial FCF for low-cost producers.
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Source: Seeking Alpha