Natural Gas Prices Plummet 11% as Israel-Iran Conflict Cools

October 28, 2024 Stu Turley Geopolitical, International News, Natural Gas, Top News
  • U.S. natural gas prices fell sharply on Monday due to limited Israeli attacks on Iran and Iran’s decision not to retaliate.
  • U.S. natural gas production remains near summer highs, while European gas prices remain stable.
  • The EIA forecasts lower natural gas prices for 2024, with Henry Hub spot prices averaging $2.28/MMBtu.

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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About Stu Turley 4219 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor.   He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage, and is the Co-Host of the energy news video and Podcast Energy News Beat. Energy should be used to elevate humanity out of poverty. Let's use all forms of energy with the least impact on the environment while being sustainable without printing money. Stu is also a co-host on the 3 Podcasters Walk into A Bar podcast with David Blackmon, and Rey Trevino. Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.

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