MARKETS: Rocket propellant index gains as hydrogen costs strengthen

(SpaceEnergy) The SEI Liquid Rocket Propellant Index edged 0.04% higher in the week to 25 September as stronger hydrogen and methane components outweighed lower kerosene prices amid elevated energy costs and tight refined-product markets.

The index increased to 109.41 from 109.37 on 18 September, its highest Friday reading since the series began at 100.00 on 22 May.

The kerosene index (KI) fell 1.8% week on week to 106.23. The methane index (MI) rose 1.0% to 102.73, while the hydrogen index (HI) increased 2.3% to 128.26.

Hydrogen remained the strongest component, standing 28.3% above its 22 May base level. KI was 6.2% above its base level and MI was 2.7% higher.

The latest component moves came against continued volatility in international energy and refined-product markets. The International Energy Agency said in its September Oil Market Report that benchmark North Sea Dated crude averaged $91.00/barrel in August before reaching $113.48/barrel on 9 September.

The IEA said global oil production fell by 1.6mn barrels/day month on month in August to 100.1mn barrels/day, while global observed oil inventories declined by another 95mn barrels. Refinery throughput was 4.2mn barrels/day below the same period a year earlier.

Refined-product markets remained particularly tight. The IEA estimated Gulf refined-product and LPG exports in August were almost 60%, or 3.7mn barrels/day, below February levels. Gulf diesel and gasoil net exports averaged 390,000 barrels/day, just over a quarter of their pre-war level.

The agency described the global refining system as “stretched to the limit”, citing depleted inventories and disruptions to Middle Eastern and Russian supplies.

Natural gas markets also remained elevated. Goldman Sachs Research said on 23 September that European LNG prices had risen about 70% since July to €73/MWh as of 21 September, amid restricted Persian Gulf LNG exports and low Northwest European storage.

Goldman Sachs commodities analysts forecast European gas prices to average €70/MWh during the fourth quarter of 2026, assuming a gradual improvement in Persian Gulf LNG exports during the winter. Samantha Dart, co-head of Global Commodities Research at Goldman Sachs, said Europe may need to maintain prices sufficiently high to attract LNG cargoes away from competing markets.

Hydrogen markets were also exposed to higher energy costs and supply disruption. The IEA's Global Hydrogen Review 2026 said the Middle East accounts for around one-sixth of global hydrogen production and that the conflict has disrupted production at refineries and petrochemical plants.

Global hydrogen demand exceeded 100mn tonnes in 2025, according to the IEA, with industry and refining accounting for almost all consumption. Low-emissions hydrogen production increased 20% to almost 1mn tonnes and is expected to exceed 1% of global hydrogen production for the first time in 2026.