Growing speculation about a possible economic recession triggered by the COVID-19 pandemic has begun to raise questions about the impact on the natural gas market.  A March 9 commentary by Andrew Bradford, CEO of BTU Analytics, notes that declines in natural gas demand in 2020 could decline by as much as 5%, or 4.2 billion cubic feet per day.  Continuing, he says:

“Considering the US gas market was already expected to be long supply following a weak winter 2019-2020, an additional 4.2 Bcf/d is a lot of length to manage into an already long summer gas market. Add in an oversupplied global LNG market and the US gas market could be further awash in supply if demand falters. While US operators are slashing CAPEX (capital expenditures) in the face of falling oil prices, the risk of demand shocks to the system may overwhelm the CAPEX declines.”

For Mr. Bradford’s full commentary, click here.

If There’s a Recession, What’s the Impact on Natural Gas?
Tagged on: