U.S. natural gas prices crashed on Monday after Israel launched limited attacks on Iran while Supreme Leader Ayatollah Ali Khamenei helped cool tensions after he announced Iran would not issue a direct response to Israel’s latest attacks.
Natural gas prices were trading down 11% to $2.284/MMBtu at 11.17 am CDT in Monday’s session. U.S. gas production from the lower 48 states averaged 102.8 Bcf/d over the weekend, close to 103 Bcf/d summer high and up about 2 Bcf/d from autumn lows.
In 2023, U.S. natural gas prices averaged $2.57/MMBtu, down 62% from 2022’s average, according to the Energy Information Administration (EIA).
In its October short-term energy outlook (STEO), the EIA forecast Henry Hub spot prices would average $2.28/MMBtu in 2024, and $3.06/MMBtu next year. In its September STEO, the EIA forecast Henry Hub spot prices at $2.19/MMBtu this year, and $3.14/MMBtu in 2025.
On a quarterly basis, the EIA predicted in the October STEO that Q4 2024 Henry Hub spots prices would average $2.81/MMBtu, and $3.16/MMBtu in Q1 2025, dipping lower in Q2 and then up to $3.35/MMBtu in Q4.
Meanwhile, European gas prices remain extremely range-bound, with front-month Dutch Title Transfer Facility (TTF) recently passing through EUR 39.50 per megawatt hour (MWh) at least once intra-day on every trading day except one since 30 September. Europe gas prices settled at EUR 40.024/MWh on 21 October, a w/w fall of EUR 0.535/MWh (1.3%).
EU gas inventories stood at 111.96 billion cubic meters (bcm) on 21 October according to Gas Infrastructure Europe (GIE) data; good for a 0.32 bcm w/w increase but below the five-year average build for previous years.
Europe gas inventories are now 2.56 bcm y/yu lower but 5.60 bcm above the five-year average, while storage capacity is 95.3% full. The two largest capacity holders are Germany and Italy, with German storage 97.7% full at 245.69 bcm and Italian storage 98.0% full at 196.11 bcm.
By Alex Kimani for Oilprice.com
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