Executive Summary
Crude prices steadily increased from $54 per barrel at the beginning of October to $61 at the close of 2019. The gradual increase in prices was fueled partly by optimistic market expectations in early 2020, and the announcement of the United States and China Phase One trade deal. In early December, OPEC announced their intent to deepen production cuts through March 2020, applying upward pressure on prices.
The fourth quarter of 2019 remained gloomy for investors in Appalachia as gas prices remained under $3 per MMbtu. Along with depressed commodity prices, pipeline regulations in New York continue to hamstring operators in the basin. The future of the Appalachia gas market is difficult to predict as the LNG market increases the United States’ export capacity. The basin is safe for now, however, as the Appalachia region seems to have adequate takeaway capacity going into 2020.
