🚩Gas prices rally amid positive seasonality and hurricane Rafael hit Gulf of Mexico fueling supply concerns
U.S. Henry Hub natural gas (NATGAS) contracts are gaining 8% today, with concerns about supply in the U.S. adding 'headwinds' to gas prices. Over the weekend nearly 27% of the Gulf of Mexico's oil production and 17% of its natural gas have been shut down, in the wake of raging Hurricane Rafael. The Gulf of Mexico accounts for about 15% of total U.S. oil production and about 2% of natural gas production, but even marginal changes in supply could flow out to the market. Increases may be further supported by seasonality, which suggests a potentially 'opportune time' for an increase in long gas positions.
In previous years, except for 2020, mid-November has proven to be a 'apt' moment for bulls, on gas. Source: NGI Gas Intelligence
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Open account Try demo Download mobile app Download mobile app- According to Bureau of Safety and Environmental Enforcement (BSEE) production losses due to Hurricane Rafael have amounted to 1.12 billion cubic feet of gas so far. About 310 million cubic feet of production was halted yesterday, according to BSEE estimates.
- The National Hurricane Center (NHC) reported that Hurricane Rafael will 'rage' in the central Gulf of Mexico for some time, before turning south and southwest in the following days. Today, Hurricane Rafale has already been downgraded to a tropical storm, but gas contracts are maintaining upward momentum.
NATGAS opened with a gap at $2.75/mmbtu; they have now risen to near $2.88 and have broken above the 23.6 Fibonacci retracement of the last downward wave.
Source: xStation5
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