A split reality is emerging for U.S. shale drillers: Those that primarily pump oil are still struggling to survive, while those that produce natural gas are slowly seeing signs of recovery.

Oil-focused fracking companies are under extreme financial strain, as renewed concerns about the coronavirus pandemic are weighing down crude prices. But gas-focused drillers are getting a long-awaited reprieve. Natural-gas prices are climbing ahead of winter, and are less sensitive to lockdowns that erode demand for transportation fuels.

U.S. benchmark oil prices tumbled about 11% last month to their lowest level since early June, before edging up to $36.81 a barrel on Monday, as some European countries imposed new lockdowns amid a resurgence in cases of Covid-19, the illness caused by the new coronavirus. Meanwhile, U.S. benchmark natural-gas prices soared 33% last month to their highest level in nearly two years, before settling slightly lower on Monday at $3.24 per million British thermal units.

The result is a reversal of fortunes in the U.S. shale patch, where oil companies have long overshadowed their gas-focused peers. The market value of the six largest public Appalachian gas companies, including EQT Corp. and Range Resources Corp. , has climbed about 18% since the start of 2020. That compares with a 53% drop in the combined market capitalization of the 25 largest U.S. oil companies, according to data from S&P Global Market Intelligence.

“Being in natural gas, we think, is an important thing right now,” Marathon Petroleum Corp. Chief Executive Michael Hennigan said during the company’s third-quarter earnings call Monday.

This post first appeared on wsj.com

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