Greater Houston Partnership Research Department issues October energy update

The Greater Houston Partnership Research Department has issued the following press release:

The closing spot price for West Texas Intermediate (WTI), the U.S. benchmark for light, sweet crude, averaged $81.75 per barrel in October ’21, up from $39.45 for the same period in ’20, according to the U.S. Energy Information Administration (EIA). October ’21 marked the first time since October ’14 when prices averaged over $80. 

Price increases can be attributed to the following: 

• The Organization of Petroleum Exporting Countries (OPEC) and its allies refusing to increase production from their current output of 400,000 barrels per day.
• Oil and gas companies no longer receiving the amount of investment from Wall Street to boost production as they did prior to the COVID-19 pandemic.
• High natural gas prices causing countries in Asia and Europe to switch from using natural gas to petroleum in the electric power sector.

U.S. natural gas stockpiles remain below average due to the increase of exports and high levels of consumption during the hot summer months. October’s natural gas prices averaged $5.54 per million British thermal units (MMBtu), up 129.9 percent from $2.41 in October the year before. For the 12 months ending October ’21, gas prices averaged $3.61 per MMBtu, compared to $2.01 for the same period in ’20.  

In its latest Short-Term Energy Outlook, the EIA forecasts WTI to average $80.45 per barrel and Henry Hub natural gas spot prices to average $5.54/MMBtu in the fourth quarter of this year.

Prepared by Greater Houston Partnership Research Department