EnergyWatch

OPEC deal is bad news for US gas and good news for LNG

OPEC's decision to shrink oil production is bad news for the US gas bulls currently benefiting from the highest price in two years. But the deal also promises a boon for the liquefied natural gas market.

Photo: Kamran Jebreili / AP Polfoto

OPEC's decision to shrink oil production is both a blessing and a curse for natural gas markets.

It's bad news for the US gas bulls enjoying a rally that has propelled prices to the highest in two years. Crude explorers have more incentive to drill with oil futures surging on the promised cuts by the Organization of Petroleum Exporting Countries. And with every barrel of oil they pull out of the ground, they'll inevitably pull out gas, a byproduct that threatens to add to a US supply glut that's already hit a record.

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