MARKETS: Rocket propellant index rises 0.7% as hydrogen strengthens

(SpaceEnergy) The SE Liquid Rocket Propellant Index rose 0.7% in the week to 2 October, driven by a 1.6% increase in its hydrogen component, while methane also gained and kerosene declined amid volatile energy markets.

The index reached 110.21, up from 109.41 on 25 September, its highest Friday reading since the series began at 100.00 on 22 May.

The hydrogen index (HI) rose 1.6% to 130.36, approaching its September peak of 131.33. The methane index (MI) increased 0.3% to 103.11, while the kerosene index (KI) declined 0.5% to 106.79.

Hydrogen remained the strongest component, standing 30.4% above its May base level, compared with gains of 6.8% for kerosene and 3.1% for methane.

RaboResearch reported on 2 October that crude oil and LNG flows through the Strait of Hormuz had improved during September, although Russia had extended its diesel export ban. The bank's weekly energy research described supply conditions as tight amid continuing conflicts in Iran and Ukraine.

ING Research had also highlighted pressure on refined-product supplies. In its September energy outlook, Warren Patterson, head of commodities strategy, said diesel and gasoil markets were particularly tight because disruptions to Persian Gulf exports coincided with reduced Russian supply and limited spare refining capacity.

ING forecast Brent crude to average $80/barrel in the fourth quarter under its base-case scenario, while warning that European natural gas prices remained vulnerable to further increases as winter approached.

Goldman Sachs Research separately estimated on 23 September that European LNG prices had risen around 70% since July to €73/MWh. Samantha Dart, co-head of Global Commodities Research, attributed the pressure to restricted Persian Gulf LNG exports and competition for available cargoes.

Goldman Sachs forecast European gas prices to average €70/MWh in the fourth quarter, assuming a gradual improvement in Persian Gulf LNG exports during winter. The bank said a prolonged disruption could require substantially higher prices to reduce demand.