Executive Summary
Oil prices were relatively stable in Q3 2021 following a significant run-up in the first two quarters. Front-month futures prices for West Texas Intermediate (WTI) generally oscillated between $65/bbl and $75/bbl. Demand for crude oil was tempered due to the rise in Delta variant COVID-19 cases, which decreased travel activity. While there are signs that the E&P industry may be emerging from the relatively high volatility of the past year and a half, the trajectory of production growth is less clear. Henry Hub natural gas front-month futures prices began the quarter at approximately $3.63/mmbtu but broke above $5.00/mmbtu in September. Various factors may account for the run-up in natural gas prices in Q3, including increased demand for U.S. LNG exports, leading to some concern regarding further increases in gas prices as we approach winter.
