Energy Prices Supported by Hurricane Helene

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Energy commodities reacted significantly to the repercussions from Hurricane Helene.

Crude Oil

WTI futures remain bearish
  • WTI crude futures closed around $68.2 per barrel on Friday, recovering some of the previous session’s losses as Hurricane Helene forced Gulf of Mexico producers to cut output.
  • Meanwhile, investors weighed fresh stimulus from top crude importer China against expectations for higher global supply.
  • Persistent weak demand from China has been pressuring the oil market for several months.
  • Futures plunged following reports that Saudi Arabia plans to increase production later this year, with OPEC+ scheduled to raise output by 180k barrels/day in December.

Gasoline

Gasoline prices struggle to recover as US exports strengthen
  • Gasoline net exports marked a 7-month high change, on a yearly basis, reaching +229k bpd, +28.3% y/y.
  • US gasoline futures climbed above $1.95 per gallon, rebounding from the February 2021 low of $1.88 observed on September 10th.
  • This increase was largely driven by concerns over supply disruptions in the Gulf Coast, where 42% of crude oil production in the US Gulf of Mexico has been halted.
  • The IEA recently highlighted a slowdown in global oil demand growth, particularly due to China’s economic slowdown, and has forecast a potential supply surplus in 2024, even if OPEC+ maintained its production cuts.
  • Data showed that China’s crude oil imports decreased by 3.1% from January to August 2024 compared to the same period the previous year.

Natural Gas

Natural gas reaches 3-month high
  • US natural gas futures surged nearly 5% to $2.9/MMBtu, the highest in three months, as Hurricane Helene hit the Southeast, prompting Gulf of Mexico producers to cut output and leaving millions without power.
  • Prices were further supported by strong gas flows to Venture Global’s Plaquemines LNG export plant in Louisiana, nearing mid-August highs of 35 mcf/day, though still a fraction of its full 1.8 bcf capacity.
  • EIA reported that natural gas inventories were strengthened nearly +4% compared to the previous year, raising concerns for a possible correction in the aftermath of the hurricane.
  • Long non-commercial positions plummeted for the 4th consecutive week, the lowest from late June, as speculators anticipate mild temperatures to add bearish movement in the short run.