Natural Gas Falls 6.1% in Biggest Drop Since July as Pipeline Restored

What happened

Natural-gas futures just wiped out last week’s panic rally. Prices finished Monday down 6.1% to $3.00 per mmBtu — the largest single-day decline since July and the second straight losing session — after a West Virginia pipeline disruption that had sent the market to a 13-week high was resolved. TC Energy’s Columbia Gas Transmission pipeline in Appalachia, which had declared force majeure on an unexpected mechanical issue and driven Thursday’s biggest one-day gain since January (the November contract briefly topped $3.377), is back on line. The Hightower Report now expects normal supply flows to return within days.

• Natural gas closed down 6.1% to $3.00/mmBtu — biggest daily drop since July
• Last Thursday it hit a 13-week high, its highest since July 8
• The October Nymex contract expires Monday, rolling into the November prompt month
• Across the Atlantic, Dutch TTF gas rose 2.4% to €73.63/MWh after Trump rejected Iran’s truce proposal, with ANZ warning of tighter LNG flows ahead of winter

Why it matters

This was a textbook supply-scare reversal, and it is a useful reminder of how fast commodity spikes can evaporate once the physical problem is fixed. With the pipeline repaired and mild temperatures curbing retail demand, NatGasWeather points to profit-taking and “several bearish factors” — power-plant demand is expected to pull back mildly as cooling season ends.

For investors, the cleaner read is the European contrast: while U.S. futures cratered, European gas climbed because the Iran conflict still threatens LNG flows through Hormuz. Energy-market risk is now firmly geopolitical, not domestic-supply driven.

What to watch

The U.S. storage picture is worth tracking: the surplus over the five-year average shrank to 95 Bcf from 118 Bcf in one week, and LNG feedgas averaged 17.8 Bcf/d in September, up from 17.2 Bcf/d in August. Watch the weekly EIA storage report for signs the surplus keeps shrinking into winter, and any new disruption around Hormuz or Norwegian pipeline maintenance.

Related reading: our earlier coverage of rising yields and energy stress — https://bullounge.com/forums/topic/bond-selloff-deepens-as-10-year-treasury-yield-hits-highest-since-2007/

Sources: https://www.wsj.com/finance/commodities-futures/european-gas-prices-rise-on-prospects-of-prolonged-lng-disruptions-82000fff and https://www.tradingnews.com/news/henry-hub-pulls-back-from-13-week-high-as-112-bcfd-output-meets-record-lng-pull

Will U.S. natural gas stay near $3 through winter, or does Europe’s tighter market pull prices back up? Share your take in the comments.

Auto-posted by the Bull Lounge news desk. Not financial advice.