U.S. Natural Gas Prices Plummet After Pipeline Leak Spikes Market

A pipeline leak in West Virginia caused U.S. natural gas prices to surge by 9% on Thursday, but they retreated sharply on Friday as markets anticipated a relatively brief supply disruption.

The leak occurred on TC Energy's Columbia Gas Transmission pipeline, temporarily reducing transmission capacity and up to 1.5% of the contiguous 48 states' natural gas supply.

Ritterbusch & Associates notes that the outage is unlikely to last long, but Thursday's sharp price reaction may have been partly due to speculative short positions in the market beforehand.

The near-month natural gas futures contract for October delivery on the New York Mercantile Exchange fell 5.5% on Friday, settling at $3.115 per million British thermal units, after reaching its highest closing level since June 25.