Very interesting read.

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Excerpted:

A serious glut of natural gas has appeared in the North American market and has caused havoc with its price. Analyzing the data shows those trends have begun to reverse and movements into storage indicate the glut will soon be removed, which should allow natural gas prices to rise to a level that restores profitability, a substantial increase from present levels.

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What is the implication of this forecast?

A removal of the supply glut should elevate the price of natural gas to its full cycle cost of production plus a reasonable profit. We are seeing basic economics at work. Markets are in the long term pursuit of equilibrium. When supply and demand get out of balance, the price mechanism adjusts to restore equilibrium. Excessive supply brought prices down. Producers will exhibit rational behavior in the long run, and they will curtail production at prices that are below cost. We should expect no significant deviation from this pattern of lower injections until equilibrium prices are achieved, meaning total costs plus reasonable profit. Different companies operating in different fields have different cost structures so it is difficult to make a general statement about industry-wide costs and therefore where prices will return to. However, from what I have read from a variety of sources, I think that costs plus a reasonable profit forecasts $5 - $6 natural gas. It likely won't be a steady rise to that point, but once the market accepts that the glut has been removed, prices should get there. The time frame for this to occur should be measured in months, not years.