A growing number of analysts have penciled in lower natural gas prices and more gas and oil production cuts for 2024 to remedy supply-demand imbalance, which worsened late in 2023 amid a mild start to winter and record production levels.

The heating season only saw intermittent cold spells in November before December clocked in as one of the warmest on record. The combination with record gas production had by late December swelled the surplus of gas in storage to 316 Bcf, or 10% above the five-year average.

“We believe U.S. gas prices need to average lower than we thought previously to incentivize incremental demand via coal-to-gas substitution and lower supply via steeper Haynesville Shale declines,” Goldman Sachs Group’s Samantha Dart...