How much has COVID-19 affected natural gas prices?
Thursday, June 11, 2020
Natural gas prices have suffered due to disrupted demand caused by the global economic shutdown brought on by COVID-19, according to Investment U.
U.S. natural gas consumption is expected to decrease 3.9% year-over-year to 81.9 billion cubic feet per day in 2020, according to the Energy Information Administration. One of the reasons for this drop is a 7.1% decrease in the industrial sector caused by lower manufacturing activity amid stay-at-home orders.
If current predictions hold true, 202 will be the first year in over a decade that demand for natural gas has declined. Typically, producers have seen natural gas demand grow more than 3% annually.
In the current market, prices are also being impacted by increasing volumes of stored natural gas. At the end of April, 2.3 trillion cubic feet of natural gas was being stored, which was 20% higher than the five-year average. Storage is projected to reach 4.2 trillion cubic feet by the end of October, which would be a record.
Learn more: Investment U > Has COVID-19 been good or bad for natural gas?
Leave a Comment
Marcellus & Utica Shale Well Map
Additional Shale Maps
Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.