U.S. natural gas prices fell sharply on Monday after Israel carried out limited attacks on Iran. This decline was partly offset by a calming statement from Iranian Supreme Leader Ayatollah Ali Khamenei, who announced that Iran would not retaliate directly to Israel’s recent actions.
By 11:17 AM CDT, natural gas prices had dropped 11% to $2.284 per million British thermal units (MMBtu). Over the weekend, U.S. gas production in the lower 48 states averaged 102.8 billion cubic feet per day (Bcf/d), nearing the summer high of 103 Bcf/d and up about 2 Bcf/d from the lower autumn levels.
In 2023, the average price of U.S. natural gas was $2.57 per MMBtu, which marks a 62% decrease from the average in 2022, according to the Energy Information Administration (EIA). The EIA’s October short-term energy outlook (STEO) predicts that Henry Hub spot prices will average $2.28 per MMBtu in 2024 and rise to $3.06 per MMBtu in 2025. In its September STEO, the EIA had forecast prices of $2.19 per MMBtu for 2023 and $3.14 per MMBtu for 2025.
On a quarterly basis, the EIA expects Henry Hub spot prices to average $2.81 per MMBtu in the fourth quarter of 2024, and $3.16 per MMBtu in the first quarter of 2025. Prices are projected to dip in the second quarter before climbing to $3.35 per MMBtu in the fourth quarter.
In Europe, gas prices have remained stable, with the front-month Dutch Title Transfer Facility (TTF) consistently trading above EUR 39.50 per megawatt hour (MWh) since September 30, except for one day. On October 21, European gas prices settled at EUR 40.024 per MWh, reflecting a week-over-week decline of EUR 0.535 per MWh (1.3%).
As of October 21, EU gas inventories were at 111.96 billion cubic meters (bcm), which is a 0.32 bcm weekly increase but below the five-year average for this time of year. Compared to last year, European gas inventories are 2.56 bcm lower but 5.60 bcm higher than the five-year average. Storage capacity across Europe is currently 95.3% full, with Germany and Italy holding the largest capacities. German storage is 97.7% full at 245.69 bcm, while Italian storage is 98.0% full at 196.11 bcm.
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