Natural gas pricing continues to be strong into October 09:36 AM EDT, 09/03/2021 (MT Newswires) -- Benchmark natural gas rose to the highest since mid-2014 early on Friday as 91% of Gulf of Mexico supplies remain shut in following last week's passage of Hurricane Ida through the gulf and a bullish storage report from the Energy Information Administration.
Gas for October delivery was last seen up US$0.04 to US$4.68 per million British thermal units, the highest since June, 2014.
The rise comes as about a two-billion cubic feet of gulf supply remains shut in following the Ida's passage, as producers continue to assess any damage to platforms. The drop in supply comes as demand remains solid even as the hottest part of the summer is past and demand for LNG for the European market remains high.
The EIA on Thursday reported U.S. gas inventories rose by 20-billion cubic feet last week, leaving supplies stored for winter use at 2.87-trillion cubic feet, 7.2% under the five-year average.
"What appears to be an extended GoM outage has not only crude and product markets feeling the pinch, but the Gulf gas market similarly, with recent production levels in the ~90bcfd range bolstering balances even as power generation demand trends lower seasonally from record total demand (not just for natural gas) in recent weeks," Tudor, Pickering & Holt said in a note.