Natural Gas News: Futures Dip Below $1.90 Amid Hurricane Debby Impact

Natural Gas Futures Slide as Hurricane Debby Approaches

Natural gas futures dipped early Monday as Hurricane Debby approached the Southeast, potentially impacting demand. The September Nymex gas futures contract fell below $1.90, continuing last week’s downward trend.

At 13:35 GMT, Natural Gas Futures are trading $1.959, down 0.008 or -0.41%.

Storm Impact on Demand

Hurricane Debby made landfall in western Florida as a Category 1 storm, bringing cooling winds and heavy rainfall. The storm is expected to affect Georgia and the Carolinas, likely causing power outages and reducing cooling demand. This bearish influence, combined with cooler weather in the northern regions, is pressuring prices downward.

Supply and Storage Situation

Despite recent intense heat across much of the country driving strong cooling demand, bearish factors dominate the market. Production levels remain high, staying above 102 Bcf/d with a seven-day average output of 102.5 Bcf/d. The latest EIA storage report showed a smaller-than-expected build of 18 Bcf for the week ending July 26, compared to the five-year average of 33 Bcf. However, total working gas in storage remains well above both last year’s levels and the five-year average.

LNG Export Delay

ExxonMobil announced a delay in the Golden Pass LNG export project until the second half of 2025. This postponement in expanding export capacity adds to the bearish outlook for the longer term, potentially extending the oversupply situation in the domestic market.

Short-Term Forecast

The natural gas market outlook appears increasingly bearish in the short term. Hurricane Debby is bringing cooler temperatures to the Southeast, reducing cooling demand in a key consumption region. Additionally, weather forecasts indicate cooling trends spreading to the Midwest, Plains, Ohio Valley, and Northeast by midweek, further dampening demand.

While hot high pressure will dominate most of the US for the next two days, maintaining strong national demand, the subsequent cooling trend is likely to exert downward pressure on prices. Traders should monitor key support levels at $1.907 and $1.482-$1.481, as the market may test these levels in the coming days. The combination of reduced cooling demand, high production levels, and ample storage suggests a continued bearish trend for natural gas futures in the near term.

Technical Analysis

Natural gas futures are trying to reverse course after testing a mulit-month low at $1.907 earlier in the session.

The key price to watch is last week’s close at $1.967. Sellers may try to defend a test of this level, but overtaking it could fuel a strong intraday short-covering rally.

Additionally, a close over $1.967 will form a potentially bullish closing price reversal bottom. A confirmation of this chart pattern could fuel a 2 to 3 counter-trend rally.