There are thousands of natural gas producers. Most of the remaining natural gas supplies are transported from neighboring Canada via reliable pipelines. Natural gas is a commodity . Like other commodities, natural gas is traded in an open market. Natural gas price movements occur as the supply and demand cycles interact.
Supply is tight .
Because of lag times inherent in matching supply with increased demand, supplies can become tight. According to EIA and publicly available data, the price of natural gas and oil collapsed in 1998 and 1999, resulting in the industry allocating less capital to exploration and production activities. Now that continued strong demand has resulted in the increase in natural gas and oil prices, the industry is able to invest more in production. As a result, supply is expected to slowly begin increasing. Tight supply is not a sign of inadequate resources .