Since early November, natural gas prices have continued to slide. A significant change from this time last year, the December contract settled at $2.470 per MMBtu, nearly 48% below the December 2018 settle. Throughout the month of November, natural gas prices declined slowly, with some reaction to colder temperatures and stronger demand during the middle of the month. The day after Thanksgiving; however, the market experienced its greatest decline since January 2019 and the January 2020 contract declined 8.7% to $2.284 per MMBtu. Throughout 2019, natural gas prices averaged $2.634 per MMBtu, with only the month of January settling above $3.00 per MMBtu. In comparison, the 2018 calendar year average was $3.086 per MMBtu, with a peak settlement of $4.715 per MMBtu in December 2018. The 2020 calendar year strip closed out the week averaging $3.303 per MMBtu. This week, the Energy Information Administration (EIA) reported that natural gas storage experienced a withdrawal of 19 Bcf for the week ending November 29th, putting current inventories at 3,591 Bcf, 19.7% above last year’s level and less than 1% below the five-year average, for the same reporting week. In addition, the EIA data showed that U.S. crude-oil production has tied a record-high of 12.9M bpd, which according to analysts, supports the belief that associated gas continues to keep this market over-supplied.
