FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
60,105,518Confirmed
1,414,868Deaths
41,552,398Recovered
Fetching Location Data…
Advertisement
Advertisement
James Hyerczyk
Natural Gas

Natural gas futures are trading higher on Wednesday shortly after the cash market opening as traders continue to assess the possible impact of Hurricane Delta on production. On Tuesday, prices took a hit after the threat of the hurricane striking Gulf Coast facilities later this week increased significantly.

According to Natural Gas Intelligence (NGI), “Like Hurricane Laura in August, Hurricane Delta is poised to quickly sap the momentum building in liquefied natural gas (LNG) demand. The Category 4 storm is expected to make landfall in Louisiana early Saturday, less than two months after Laura devastated Lake Charles, LA.”

At 12:37 GMT, December natural gas is trading $3.165, up $0.069 or +2.23%.

Short-Term Weather Outlook

According to NatGasWeather for October 7 to October 13, “The northern US will be mostly comfortable today with highs of upper 60s and 70s, then cooling across the Great Lakes and Northeast Thursday – Saturday as a weather system sweeps through with highs of 50s and 60s, lows of 30s and 40s.

The rest of the US will be warm to very warm with highs of 70s and 80s besides the hotter Southwest into California with 90s to 100s. Most of the US will be comfortable this weekend and early next week besides the Northwest and Northern Plains as weather systems bring showers and cooling. Overall, national demand will be low.”

Advertisement

Daily Forecast

Today’s early price action suggests investors should be prepared for two-sided trading until the path of Hurricane Delta is clarified.

We’re expecting some loss of LNG demand because facilities are being evacuated in the Gulf of Mexico as a precaution. These operators don’t wait. When a tropical storm enters the Gulf of Mexico, they begin shutting down. However, the path of the hurricane then become most important.

Several weeks ago Hurricane Laura directly hit natural gas facilities, prompting an extended shutdown do to extensive repairs. The lower demand created by this event drove down natural gas prices.

This time, the path of Hurricane Delta is expected to miss the facilities so there would be no need for an extended shutdown or extensive repairs.

Bespoke Weather Services suspects some LNG volumes would drop off in light of the storm, however, at this time, it does not expect a direct hit on any of the facilities, “as it is typically more difficult by this time of the year to get a major hurricane hit in the western Gulf.”

Basically, we expect to see lower prices if natural gas facilities take a direct hit, but higher prices if the hurricanes misses and LNG demand remains solid.

For a look at all of today’s economic events, check out our economic calendar.
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US