NEWS
US gas prices surge on $12 after output cuts
London, Aug 31 (LNG journal)
- US natural gas spot and futures prices surged over $12 per million British thermal units on Wednesday as the industry assessed the impact of production cuts caused by Hurricane Katrina.
The New York Mercantile Exchange October natural gas future on its second day of trading was last at $12.18 per MMBtu in electronic Access trading on Wednesday after closing on Tuesday at $11.66 MMBtu.
The Gulf of Mexico, where the hurricane hit, is where around a quarter of US domestic oil and gas output comes from in the form of 1.5 million barrels per day of crude and 10 billion cubic feet per day of natural gas.
The US federal government said the hurricane shut down 95 percent of daily crude production from the Gulf and 88 percent of natural gas production. In total, 645 platforms and 90 rigs were evacuated before the hurricane, according to the US Interior Department's Minerals Management Service in Washington. See latest MMS report
ExxonMobil Corp. said a preliminary assessment it carried out had found that its gas processing plant and related facilities on Grand Isle, Louisiana, was one of the facilities that had sustained damage.
An estimated 8.79 Bcf/d of natural gas was shut in when the hurricane struck production facilities off the Louisiana and Mississippi coasts, the MMS said.
The Henry Hub, where much of the nation's natural gas is delivered to buyers and which was temporarily closed in a force majeure action early on Monday, reopened for business this week and the Henry Hub spot price surged to highs, closing on Tuesday at $12.36 per MMBtu.
