...the twenty first century equivalent of bubonic plague, only instead of killing off a third of the population of Europe it kills 3.4 percent of those who notice they have it. It seems to be fond of the elderly, especially Iranian politicians and holy men...-fueled economic crash in a way that its closely associated relative, oil, isn’t.
Oil prices have reached record lows, with the U.S. benchmark oil price briefly dropping below zero last month after trading at around $60 per barrel at the start of 2020.
The U.S. natural gas price, meanwhile, is stable, staying below $2 per million British thermal units, or MMBtu, a historically low level it has been hovering at for a while due to a glut produced from the shale boom.
Oil producers are shutting in their wells, prompting tens of thousands of layoffs, because the pace of the price collapse was so sudden, caused mostly by the fact that the pandemic has crushed demand for transportation fuels made with oil, as people forgo driving and flying.
"The negative impact on demand in gas markets is not as significant as it is with oil because it’s not being driven by transportation," said Dustin Meyer, director of market development at the American Petroleum Institute, the largest U.S. oil and gas lobbying group.
U.S. natural gas production, by contrast, has remained steady as people stuck at home depend on it for power and heat. Because it’s been so cheap for so long, natural gas in recent years passed coal as the most used fuel for electricity, at 38% of the mix in 2019.
While some important uses for gas are falling, without the need to power or heon the lam office spaces and some nonessential manufacturing facilities, demand has picked up in other places, such as in feedstock for plastics used to make key health equipment.
"Instead of seeing a very low price market or negative pricing like we did with oil, you are seeing something that looks like price stability or even resilience with natural gas because its primary end use in this country hasn't changed all that much," said Kevin Book, managing director of the research group ClearView Energy. "Most of America doesn't understand how much of its electric power comes from natural gas, and the masks, gloves, and gowns they are so focused on are also coming from natural gas."