New York — Opec’s decision to shrink oil production is both a blessing and a curse for natural gas markets. It is 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 oil cartel Opec. And with every barrel of oil they pull out of the ground, they will inevitably pull out gas, a byproduct that threatens to add to a US supply glut that is already hit a record. "These guys will drill more, and you are going to get that extra gas at an inconvenient time," said Jason Schenker, president of Prestige Economics in Austin, Texas. "It’s bearish for US gas for the next three-to-nine-month window." While the potential flood of so-called associated gas threatens to derail the rally in US gas prices, it also stands to be a boon for the liquefied natural gas (LNG) market. A large share of LNG contracts are linked to benchmark oil futures. And a drop in US g...
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