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Energy commodity prices experienced another session of declines on Tuesday, despite investor concerns over potential supply disruptions from Hurricane Beryl.
The price of West Texas Intermediate (WTI) light crude, tracked by the United States Oil Fund (NYSE:USO), fell for the third straight session, dropping 0.9% to $81.5. Similarly, Henry Hub natural gas prices, represented by the United States Natural Gas Fund (NYSE:UNG), fell 1.1%, erasing Monday’s gains entirely.
Hurricane Beryl made landfall in the southern United States on Monday morning as a category one hurricane, resulting in eight fatalities and disrupting power for over 2 million people in Texas. However, it was downgraded to a tropical storm shortly afterward.
According to a Natural Gas Intelligence report, major ports along the upper Texas coast were set to reopen on Tuesday as cleanup operations continued, but a key LNG export facility remained closed.
“The overall impact on natural gas prices appeared to be minimal,” managing editor Caroline Davies stated.
Natural Gas Intelligence explained that Gulf Coast storms no longer significantly impact the offshore oil and gas industry due to the rise of unconventional drilling, which has unlocked substantial reserves in the Lower 48 states.
Nevertheless, most U.S. liquefied natural gas export capacity is situated in Texas and Louisiana. The Freeport LNG Development LP facility, located about 50 miles from Matagorda, shut down on Sunday in anticipation of Beryl.
Freeport relies on the electricity grid for power, which is supplied by Centerpoint Energy Inc. (NYSE:CNP).
A company’s spokesperson informed Natural Gas Intelligence that production at Freeport LNG's liquefaction facility remains ramped down following Hurricane Beryl.
Feed gas demand fell to nearly zero from 1.6 Bcf/d, and flows remained below 1% capacity utilization as of Tuesday, according to NGI's U.S. LNG Export Flow Tracker data.
Corpus Christi, located about 250 miles south of Freeport and home to Cheniere Energy Inc. (NYSE:LNG)'s Corpus Christi LNG facility, was unaffected by Beryl.
Temporary outages also impacted Kinder Morgan Inc. (NYSE:KMI)’s Dayton and West Clear Lake storage facilities near Houston. A company’s spokesperson revealed Natural Gas Intelligence that West Clear Lake has resumed service, while Dayton remains offline due to ongoing power outages in the area.
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