MARKETS: Rocket propellant index gains 2.16% on hydrogen, oil and gas rally

(SpaceEnergy) The SE Liquid Rocket Propellant Index (SELRPI) gained 2.16% in the week ending 21 August to 106.04 points as hydrogen, kerosene and methane feedstock markets strengthened.

The principal driver was the SE Hydrolox Index (SEHI), which rose 5.93% on the week to 120.29 points, as elevated European electricity and natural gas prices increased pressure on energy-intensive hydrogen production costs.

European gas remained particularly firm. European benchmark TTF futures settled at €65.865/MWh on 21 August, up 7.23% week on week, as low storage and constrained global liquefied natural gas (LNG) supply kept the market tight.

European gas inventories were about 61% full in mid-August, their lowest level for the period since at least 2009, according to the Energy Policy Research Foundation. The organisation said disruption to Qatari LNG exports through the Strait of Hormuz had intensified competition for cargoes.

“Prices will stay elevated precisely to attract LNG volumes,” said an analyst with a European energy consultancy.

“It is clear now that we will be entering winter with very low stocks, hence we need to attract more LNG in order to need winter demand, particularly, if it gets very cold,” he added.

The SE Kerolox Index (SEKI), the largest component in the basket, gained 1.27% to 103.34 points, supported by higher crude and refined-product markets. Brent crude finished 21 August at about $94.24/bbl, gaining around 6% on the week as continued restrictions on traffic through the Strait of Hormuz maintained a geopolitical risk premium.

US distillate inventories, another indicator for middle-distillate markets, fell to 103.391 million barrels from 105.619 million barrels a week earlier, according to the US Energy Information Administration.

The SE Methalox Index (SEMI) increased 0.90% to 101.36 points. European gas prices provided upward pressure, while US natural gas was more subdued. Aegis Hedging said prompt-month Henry Hub gained $0.02 during the week to settle at $2.76/MMBtu, supported by a reduction in the storage surplus.