A vast amount of natural gas harvested throughout the continent of North America comes from deep within large deposits of shale. The United States’ Appalachian Mountains, which run all the way from Northern Georgia to the top of New England, are home to tons of natural gas that’s wedged underneath shale. These shale gas holdings have been considered highly valuable to oil and gas companies operating within the United States – it’s been this way for many dozens of years, as natural gas has been reliable in its market performance and as a solid investment vehicle.
After a major competitor on the American domestic natural gas market just two days ago wrote off over $10 billion in assets from their ownership, people’s opinion on the viability of natural gas as a valuable investment on the modern oil and gas market is seriously decreasing.
That competitor was Chevron, which happens to be larger than every single oil and gas company on planet Earth except for Exxon. News broke just less than two days ago regarding the company’s decision to let go of assets worth so much money up to even just a few months ago; Chevron initiated their market-wide information release by kicking the process off with a basic, official press release that news agencies quickly picked up on.
According to NASDAQ, the assets that Chevron has decided to part ways with will end up being valued somewhere between $10 and $11 billion – either way, that’s still a lot of assets to write off in exchange for absolutely nothing!
The majority of these assets are confirmed to be shale gas holdings throughout the Appalachian Mountains. The next-most valuable item in this cohort of assets is a currently-being-constructed Canadian facility responsible for and more than capable of exporting natural gas in liquid form.
On the global commodities market, or more particularly that of commodities that are related to oil and gas, natural gas is steadily losing value in terms of current trading price. However, despite this fact, the oil and gas industry’s total market share is being taken away from coal, which virtually nobody is surprised to see happening, in terms of what’s being used to fuel the creation of energy and the subsequent capturing of electricity.
One market expert from Ernst & Young believes that the reason for the ultra-low natural gs price right now is due to major oversupply; the market is going to feel the effects for at least two to three years.
Dil Bole Oberoi
