Hurricane Katrina barreled ashore with the eye just east of New Orleans Monday morning, shutting in about 8.3 Bcf/d or more than 80% of the 10 Bcf/d of natural gas production in the Gulf of Mexico. The expiring September futures contract shot past $12 Sunday night/Monday morning, but slipped during the session Monday to go off the board at $10.847, up $1.055 from Friday’s close. The Henry Hub, closed in a force majeure action early Monday, reopened for business late in the day. The U.S. Coast Guard expected to be able to send out planes over the Gulf Monday night or Tuesday morning to assess damage.
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EIA Projects ‘Unseasonably Strong’ Gas Prices
Given the double-barreled demand for natural gas by power generators and storage, spot gas prices will average an “unseasonably strong” $4.65/Mcf during this spring and summer, and $5/Mcf for the entire year, according to the Energy Information Administration (EIA) last week. This compares to projections by Dynegy Marketing and Trade and PanCanadian Energy Services of $3.50/Mcf to $5.50/Mcf for the remainder of the year.
EIA Projects ‘Unseasonably Strong’ Gas Prices
Given the double-barreled demand for natural gas by power generators and storage, spot gas prices will average an “unseasonably strong” $4.65/Mcf during this spring and summer, and $5/Mcf for the entire year, according to the Energy Information Administration (EIA).