Natural Gas Price Fundamental Weekly Forecast – Excessive Hurricane Damage to Florida Could Lead to Lower Demand
U.S. natural gas futures retreated last week on worries about the potential impact of Hurricane Irma, which is expected to curtail fuel demand as the storm moves across Florida this week-end.
October Natural Gas settled at $2.890, down $0.180 or -5.86%.
The price action suggests the market was unable to sustain earlier strength on the daily chart as weakening demand off of hurricane activity more than offsetting any potential loss of production.
In other news, U.S. utilities injected 65 billion cubic feet (bcf) of natural gas into inventories during the week-ended September 1, according to the U.S. Energy Information Administration.
The build was in line with the 64 bcf injection projected by analysts in a Reuters poll, but above the 38 bcf build during the same week a year ago and a five-year average build for that week of 58 bcf.
The direction of the market this week will be determined by the damage inflicted on Florida this week-end and early next week. At this time, Hurricane Irma is moving near the Florida Keys. It is then expected to move up the west coast of Florida. Tampa is a big target and a highly populated area.
Lower air conditioning demand due to massive power outages could be very bearish for natural gas especially if it takes weeks instead of days to bring back electrical power.