The Gulf of Mexico has traditionally been a big source for both oil and natural gas for the U.S. When hurricanes blow through the Gulf and shut down oil and gas rigs, the markets always respond. That is, until now.
Even though Hurricane Isaac took an eerily similar path to Katrina (from 2005), and although nearly 3/4 of natural gas production coming from rigs in the Gulf was “shut-in” (or stopped, in lay terms), how did the markets respond? Gas futures prices went up 2%—hardly a blip. Why? Because of an abundance of shale gas—including (particularly) an abundant supply of shale gas from the Marcellus.