Natural Gas Price Fundamental Daily Forecast – Prices Spike Higher Led by Hurricane Fears, Bullish EIA Data

Natural gas futures are trading higher shortly before the release of the weekly government storage report. However, it’s not the potential outcome of the report driving prices higher, but the potential impact of a tropical storm expected to target the Gulf Coast by next week.

This time the storm is expected to avoid the East side of the Gulf of Mexico, but rather the western edge of the Gulf covering Texas and energy infrastructure. When a hurricane hits Florida, it tends to drive prices lower because of a drop in demand. But when a hurricane hits the Texas area, it tends to lead to production shutdowns as well as potential damage to infrastructure.

At 14:26 GMT, October natural gas futures are trading $4.031, up $0.106 or +2.70%.

Tropical Storm Threat Trumps EIA Storage Data

Natural Gas Intelligence (NGI) is reporting the National Hurricane Center (NHC) as of early Thursday was monitoring a disturbance in the west-central Caribbean that it said had a 90% chance of cyclone formation over the next 48 hours, potentially threatening coastal states along the Gulf of Mexico over the weekend.

“The system is expected to enter into the Gulf of Mexico Friday night and continue moving northwest ward toward the central or northwestern U.S. Gulf Coast, potentially bringing dangerous impacts from storm surge, wind and heavy rainfall to portions of the coasts of Texas, Louisiana, Mississippi, Alabama and the Florida Panhandle by Sunday and Monday,” forecasters said.

The NHC said the exact path and strength of the storm remained highly uncertain given the system was in the early stages of development.

Daily Forecast

The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 29 Bcf. This was well below the consensus estimate of 40 Bcf.

Technically, the main trend is up. The short-term range is $4.211 to $3.751. The market is currently trading on the bullish side of its retracement zone at $4.035 to $3.981, making it new support.