Sayonara cheap natural gas?
A brutally cold winter has made natural gas the new black, firing up demand and sending prices to a four-year high last week at $5.74. The sharp rally has upended assumptions that a surplus of supplies would provide inexpensive energy for decades to come, and that the U.S. could even afford to ship some of it abroad.
For years, the market has grown accustomed to the idea that natural gas—a product of the U.S. shale revolution—is both abundant and inexpensive. The breakneck pace of U.S. natgas production, which the Energy Information Administration recently predicted would jump by 56 percent from 2012 to 2040, had helped depress prices.
(Read more: Cold blast pushes record natural gas demand)
At least for the moment, analysts expect the current price spike to be temporary: Goldman Sachs recently raised its natgas forecast for 2014 in response to the rally, but expects prices to top out at $4.50. Elsewhere, Bank of America-Merrill Lynch expects prices to fall back below $4 within the next two months.