Royale Energy, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk In late 2019 and continuing into 2021, there was a global outbreak of COVID-19 that has resulted in changes in global supply and demand of certain mineral and energy products. While the direct and indirect negative impacts that may affect the Company cannot be determined, they could have a prospective material impact to the Company's operations, cash flows and liquidity, primarily related to the decline in product price, in part, as a result of a decline in demand related to “shelter-in-place” orders by various governmental bodies. Our major market risk exposure relates to pricing of oil and gas production, which during the period in 2020 resulted in historically low prices due to stay at home orders. The prices we receive for oil and gas are closely related to worldwide market prices for crude oil and local spot prices paid for natural gas production. Prices have been volatile for the last several years and have become even more unpredictable in the current period. We expect that volatility to continue. Our monthly average oil and condensate prices ranged from a high of $58.06 per barrel to a low of $54.85 per barrel and our monthly average natural gas prices ranged from a high of $3.64 per Mcf to a low of $2.56 per Mcf for the first three months of 2021.