The fillip given to crude oil prices by the approach of hurricane Francine to the US Gulf Coast proved all too brief yesterday as the international Brent benchmark crashed through the USD 70/barrel threshold to settle at its lowest close in three years.
The Brent November contract fell by 3.7%, from USD 71.84/barrel on Monday to USD 69.19/barrel, while WTI was down 4.3%, from USD 68.71/barrel to USD 65.75/barrel.
Prices were recovering on Wednesday morning, with Brent back up above USD 70/barrel. Francine is due to make landfall in Louisiana today.
The falls came despite last week’s decision by OPEC+ to postpone the partial lifting of voluntary output curbs by two months and a continuing partial shutdown of production in Libya.
They also came ahead of the much-anticipated debate last night between the presidential hopefuls in the forthcoming US election, Kamala Harris and Donald Trump.
In what could be their only debate ahead of November’s election, Harris had Trump on the defensive for much of the time but failed to adequately explain her recent changes in position on several key policies, including on fracking in the oil and gas industry, which she now supports.
In one bizarre exchange, Trump claimed that immigrants had been eating the pets of US citizens, while in another he claimed that babies were being executed just after birth by abortion zealots. The moderators felt obliged to intervene on both occasions.
Harris benefited from a post-debate endorsement by the hugely popular musician Taylor Swift and betting markets now put her in the lead by a narrow margin. In the run-up to the debate, Harris and Trump were neck and neck.
Meanwhile, European natural gas prices staged their own collapse, falling by close to 6%, while prices in other regions diverged, with Henry Hub up and JKM unchanged.
In continental Europe, the October TTF contract fell by 5.6%, from USD 12.07/MMBtu to USD 11.39/MMBtu.
In the UK, NBP was down 5.9%, from USD 11.76/MMBtu to USD 11.06/MMBtu.
In the US, the October Henry Hub futures contract rose by 2.9%, from USD 2.17/MMBtu to USD 2.23/MMBtu, in a continuation of recent volatility.
In Asia, the JKM LNG benchmark edged up by a cent to USD 13.79/MMBtu, while the TTF-JKM margin widened considerably to USD 2.39/MMBtu, because of the sharp fall in TTF.
European coal moved down with gas, but the fall was modest. API2 fell by 0.9%, from USD 4.59/MMBtu to USD 4.55/MMBtu.
European carbon prices were down to their lowest level since July, with EU carbon dioxide emissions allowances falling by 2.4% to EUR 64.37/tonne.
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WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.
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