U.S. natural gas futures saw a significant increase of over 10%, reaching $2.94/MMBtu on Monday, as Hurricane Rafael caused disruptions in production in the Gulf of Mexico. The U.S. Bureau of Safety and Environmental Enforcement (BSEE) reported that 482,790 barrels of oil and 310 million cubic feet of natural gas, representing over 25% of oil output and 16% of natural gas output, remain shut in due to the storm’s impact.
Additionally, 37 out of 371 manned platforms, or roughly 10%, have been evacuated, and two drilling vessels were displaced. Total production losses have reached 2.07 million barrels of oil and 1.12 billion cubic feet of natural gas. Although Rafael has weakened to a tropical storm after making landfall as a major hurricane, the U.S. National Hurricane Center warned it could remain in the central Gulf before shifting south and southwest later in the week.
The U.S. Energy Information Administration (EIA), in its October Short-Term Energy Outlook (STEO), predicted that Henry Hub spot prices would average $3.06/MMBtu in 2025. For the upcoming quarters, the EIA forecasts Q4 2024 Henry Hub prices to average $2.81/MMBtu, with a slight increase to $3.16/MMBtu in Q1 2025. Prices are expected to dip in Q2 2025 before rising to $3.35/MMBtu in Q4.
In Europe, natural gas futures surged to €43.8 per megawatt-hour, their highest level in a year, as colder weather forecasts drove up heating demand. Gas reserves are being depleted faster than usual, with EU gas storage now at 93% capacity—below the typical level for this time of year. A year ago, European gas storage was nearly full. On the supply side, slightly higher gas flows from Norway and continued deliveries from Russia via Ukraine have helped stabilize the market. Europe’s LNG imports have increased by 17% month-on-month, as countries stockpile gas ahead of the winter season.
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