Just four years ago, $2.50/Mcf was seen as the breakeven price for U.S. natural gas production. Today, that number has moved sharply higher. In a recent survey, 95% of shale producers said they now require at least $4.00/Mcf to justify continued development, a clear sign of lasting structural change. Two key forces are driving this shift:

1. Rising Costs: The price of steel, sand, labor, and diesel has climbed significantly since 2020. Inflationary pressures and supply chain friction have raised the baseline cost to drill and complete new wells.
2. Smarter Capital Strategy: Producers are focused on free cash flow and investor returns, not production growth. New development is selective and price-sensitive,
   driven by economics, not acreage quotas.

Storage levels are currently comfortable, thanks to a mild, extended spring—but with heat building, LNG exports surging, and coal retirements accelerating, the next tightening cycle may be just around the corner. The days of $2.00–$3.00 gas are likely behind us. $4.00 is the new floor, and producer discipline is holding firm. For power and natural gas buyers, this raises the stakes on timing and underscores the value of layered hedging strategies that stay ahead of the next market move.

The EnerNova Difference: At EnerNova, our independent research team develops innovative, data-driven strategies tailored to specific market dynamics and customer needs. We don’t follow the standard playbook — we rewrite it. If you are ready for smarter energy procurement, discover the EnerNova difference.

‍