As winter descends across the country, lower temperatures typically support energy pricing. Natural gas markets corrected to 12-month lows on seasonally mild conditions last month, however.
The outlook for 2021 is improving as we start to see the rollout of COVID-19 vaccinations across Europe and FDA approved the first vaccine in the U.S. As such, prices for crude oil have been slowing rising back towards $50 per barrel, and the appreciation should encourage a recovery in national rig counts and the volume of gas produced in tandem with oil.
Warmer temps in November pushed EIA inventories of natural gas to plateau at annual highs for several months, also leaning on prices. This combination of factors has seen natural gas prices retreat by nearly 30 percent to the $2.50 per million Btu in the last month.
The fact that this decline is happening now, as we enter winter heating season and high demand, presents buyers not fully covered through March the chance to take on defensive cover at the most attractive prices seen in the last year.
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