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Weekly Energy Market Update: January 25, 2016

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How are low oil prices affecting natural gas production? 

In the Weekly Energy Market Update for January 25, 2016, Tim Bigler — Direct Energy Business Energy Advisor — discusses low spot crude oil prices, the impact on natural gas production, and how natural gas-fired generation can compete with coal in key regions. 

Spot Crude Oil Prices

Spot crude oil prices have smashed 10-year lows. Bloomberg reports that banks with large energy portfolios have set aside up to $2.5 billion to cover energy loans and may add more if prices remain low. 

Impact on Natural Gas Production 

According to the U.S. Energy Information Administration (EIA), oil and natural gas production in the Marcellus and Eagle Ford regions are both declining due to low energy prices. 

Ohio, Pennsylvania, and New Jersey Power Regions  

How can natural gas-fired generation compete with coal generation in key regions? Under certain price scenarios and conditions, natural gas-fired generation from the power sector could increase this summer. 

For additional energy market news and information, please visit our Market Insights page and sign up for our Weekly Market Updates.

Tim Bigler, Senior Market Strategist at Direct Energy Business, is a 30+ year veteran of the U.S. natural gas, electric, and oil market.

Posted: January 25, 2016