Natural Gas News – March 11, 2020
Premium of U.S. oil over natural gas falls to lowest in over a year
Oil and Gas 360: The collapse of U.S. oil prices earlier this week and a rise in natural gas futures cut the oil-to-gas ratio to its lowest since January 2019, as some analysts saw a silver lining in the oil price drop for gas output. Gas bucked the rest of the energy sector on Monday, jumping as much as 7%, even as oil prices suffered their worst day since the 1991 Gulf War due to a price war between Saudi Arabia and Russia that threatened to overwhelm markets with supply. [O/R] [NGA/]. The oil-to-gas
ratio, or the level at which oil trades compared with gas, fell to 18-to-1 on Monday. That compares with a recent six-year high of oil trading 31 times over gas in January. In recent months, gas prices have suffered because oil producers, who were profiting from strong worldwide demand for crude, also produce a ton of what’s known as associated gas – gas that is a by-product of crude output. For more on this story visit oilandgas360.com or click https://bit.ly/2W3p3H9
Lower oil prices unlikely to significantly slow US associated gas production
S&P Global reports: The rout in global crude oil prices this week is unlikely to show an immediate impact on US associated natural gas production, but if sustained, could keep domestic output flat to modestly lower this year. On Monday, the NYMEX prompt-month WTI crude price tumbled more than $10/b, or nearly 25%, settling at just $31.13/b, S&P Global Platts data shows. In early trading Tuesday, the US benchmark oil index had retraced some of those losses, moving in the mid-$33/b area. The crude
market’s selloff, which started in late February amid mounting concern over the coronavirus outbreak, was exacerbated Monday following a move by Saudi Arabia to slash the kingdom’s oil price in response to weakening market conditions. Market jitters over the possibility that coronavirus could cripple demand in global energy markets, have yet to show a meaningful impact on gas prices, though. On Tuesday, the NYMEX prompt-month Henry Hub gas contract was up more than 10 cents, trading near $1.90/MMBtu, or its highest since late February. For more on this story visit spglobal.com or click https://bit.ly/2IA5Xk5
This article is part of Daily Natural Gas Newsletter
Tagged:
MARKET CONDITION REPORT - DISCLAIMER
The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.
