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Economic slowdown caused by coronavirus may stabilize natural gas prices in Marcellus, Utica shales

Wednesday, March 11, 2020 by

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As the coronavirus, COVID-19, continues to spread, natural gas producers in the Marcellus and Utica shales may be able to let out a sigh of relief. After months of low prices, which have forced companies to write down and sell assets, the natural gas prices in the Appalachian Basin may finally stabilize due to market conditions brought on by the coronavirus, according to Forbes.

In the wake of the coronavirus outbreak, China drastically cut its oil demand due to the international economic slowdown caused by the virus. Without less demand from the world’s largest importer, OPEC held an emergency session to agree on a short term oil production cut. Although energy ministers from Saudi Arabia and Russia met last week, talks failed and neither decreased production. In fact, Saudi Arabia increased production to over 10 million barrels per day to hurt Russia.

With international oil demand plummeting due to coronavirus fallout and production rising, prices are dropping. The result is less oil production in Texas oil fields, which means less natural gas produced as an unintentional byproduct. As natural gas producers in the Marcellus and Utica shale plays are potentially freed from Texas production, the possibility exists for natural gas prices to stabilize.

Learn more: Forbes > How the coronavirus is changing the world energy situation, and what it means for Russia, the Middle East and American shale producers

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Farm and Dairy, a weekly newspaper located in Salem, Ohio, has been reporting on topics that interest farmers and landowners since 1914. Through the Shale Gas Reporter, we are dedicated to giving our readers unbiased and reliable information on shale gas development.

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