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In the context of an oversupplied natural gas market with low prices, many top natural gas producers have announced plans to reduce production this year.

EQT Corporation, the largest natural gas producer in the United States, stated on Monday that it will implement a strategic production cut before March to address the lower benchmark natural gas prices in the U.S.

Starting from late February through March, EQT will cut its production by approximately 1 billion cubic feet per day, expecting a reduction in net production of about 30 to 40 billion cubic feet for the first quarter. One billion cubic feet of natural gas is sufficient to provide fuel for approximately 5 million American households for one day.

The company stated that this reduction is "in response to the low natural gas prices caused by the warm winter weather and the subsequent increase in inventories," and added that it will "reassess market conditions" by the end of this month.

In response to this news, U.S. natural gas futures rose by more than 7%, reaching $1.98 per million British thermal units (MMBtu).

The record natural gas production in 2023 and one of the warmest winters in decades have driven U.S. natural gas prices to their lowest levels in decades. At the end of February, the price fell to around $1.55 per MMBtu, the lowest level since 1995 (excluding the energy price collapse triggered by the COVID-19 pandemic in 2020).

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In the current oversupplied natural gas market with low prices, some top natural gas producers have already announced plans to reduce production this year.

In its last earnings report, EQT lowered its 2024 production forecast range by about 50 billion cubic feet equivalent from the forecast in mid-January to 220-230 billion cubic feet equivalent.

Due to the recent plummet in natural gas prices, Chesapeake Energy, the second-largest natural gas producing company in the U.S., has cut its fuel production plan for 2024 by about 30%. Chesapeake Energy is expected to become the largest natural gas producer in the U.S. shortly after merging with Southwest Energy.

Other energy companies, including Antero Resources and Comstock Resources, also plan to reduce drilling this year.According to data from the energy services company Baker Hughes (BKR.O), natural gas drilling companies in the United States have reduced the number of operational natural gas drilling rigs by 26% over the past year, with most of the production cuts occurring in the Haynesville, Marcellus, and Utica shale regions.

Oilfield service companies and drilling firms have also halted recruitment and may further reduce their workforce, with approximately 4,680 oilfield positions having been downsized since last December.