Executive Summary
The fourth quarter of 2020 experienced an increasing price environment compared to the volatile prices seen in the majority of 2020. WTI increased from approximately $40/bbl to $49/bbl during the fourth quarter. Natural gas was volatile but started and ended the quarter at approximately $2.50/mmbtu. The fourth quarter was a bit of a relief after experiencing (i) discord created by the OPEC / Russian rift and resulting supply surge; and (ii) the drop in demand due to COVID-19 related issues. However, the impacts of COVID-19 continue to play a role in the industry heading into 2021 as a full recovery is yet to be seen. In addition, the industry’s outlook will be impacted by the Biden Administration’s policies after being declared the winner of the 2020 presidential election. In this newsletter, we will examine the macroeconomic factors that have affected the industry in the fourth quarter and peek behind the curtain on what 2021 might hold.
