A bit ago, I was writing about the impact sanctions would have on Chinese imports and tariffs on Chinese goods. China’s economy might slip downward, and China’s imports of Russian oil would fall. The Global price of a barrel of crude would fall with it. As a result, Natural Gas prices could climb in the Marcellus.
When oil prices drop, most folks think about cheaper road trips or a slight break in the monthly budget. But for those tuned into the Marcellus Shale gas scene, there’s a much bigger story unfolding—a tale of supply, demand, and some potentially fatter royalty checks for landowners. Yes, falling oil prices could actually raise the value of natural gas in places like Pennsylvania and West Virginia, and if you’ve got oil and gas mineral (OGM) rights, that’s some prime news for your mailbox.
Here’s how it works: A lot of the natural gas we use comes up as a sidekick to oil. When oil wells churn out crude, they often bring up a helping of “associated gas.” But if oil prices tank, producers tend to pump the brakes on drilling. That means less oil and less natural gas flooding the market. With a tighter supply, the value of dry gas from places like the Marcellus Shale starts looking mighty appealing, especially to anyone who needs to heat a house, spin a turbine, or keep a stove burning.
The Marcellus region is sitting pretty in this scenario. This area is a natural gas treasure trove, and when prices rise, companies dig in. More drilling means more production, and more production means bigger royalty checks for OGM holders. That’s right—every dollar increase in gas prices translates to a little extra gravy on those monthly payouts. If you’re a OGM holder, you might start viewing the local geology as less of a backyard and more of a golden goose.
But wait, there’s more. The U.S. is becoming a global heavyweight in liquefied natural gas (LNG) exports, with buyers from Europe to Asia ready to snap up every cubic foot they can get. With Marcellus gas feeding into this system, demand goes through the roof, and so do prices. For landowners in Pa, that’s like buying Amish Furniture. here, it’s everywhere. away and it brings more money. and all that Cabage rolls in while you’re sipping coffee on the porch.
So, while falling oil prices due to the impact on the Chinese economy and Russian oil business might not thrill the bigwigs in Texas, they could be a boon for the natural gas folks up in Appalachia. As gas prices rise and royalties climb, it’s a win-win for the Nat Gas mineral holders and communities built on shale gas country. Call it a silver lining, call it market dynamics, or just call it what it is: another reason to appreciate the humble yet mighty molecule that keeps the lights on and the royalty checks rolling in.
Howdy! Grab your favorite coffee and join me as we journey through the Marcellus shale. I’m your guru’ for all things oil and gas. Expect some hearty chuckles as we wonder the ins and outs of the Appalachian Basin, because let’s face it, the new energy revolution is – full of surprises.
James A. Asbury