During the winter season, gas prices typically skyrocket as people begin making use of heating, yet this has not been the case recently. Weather phenomena this winter have proven to be very mild when compared to prior years, leading to a surplus of natural gas supply, and a falling of prices.
This past Tuesday, natural gas futures fell 5.4% to $1.895 per MMBtu, as shown in the above graph. Currently, prices are at half of what they were in January of ’19, signaling a reduction in volatility around winter time not seen before.
Another contributing factor is the rise in horizontal drilling and fracking techniques. This additionally places natural gas producing companies at risk as prices for this fuel continue to fall, with these barely achieving break-even levels. Stocks from major producers such as EQT, Gulfport, and Antero have fallen from 60-80% over the past 12 months.