US natgas slips to one-week low on lower demand outlook, storm impact

U.S. natural gas futures fell more than 1% to a one-week low on Monday on forecasts for lower demand over the next two weeks, while traders assessed the potential impact from Hurricane Debby, which could lead to lower demand for the fuel.

Front-month gas futures NGc1 for September delivery on the New York Mercantile Exchange were down 1.79 cents, or about 1%, to $1.95 per million British thermal units at 10:05 a.m. EDT (1405 GMT).

“There’s going to be power outages from the storm that could go into many state and it could also cool down the temperatures, so that is one of the reasons why we’re seeing some pressure here in the natural gas … and you also have to consider the fact that stock markets are melting down amid a slowdown in economy; I think it’s also taking its toll on the mood of the market,” said Phil Flynn, an analyst at Price Futures Group.

Hurricane Debby made landfall as a Category 1 storm in the Big Bend region of Florida’s Gulf Coast on Monday morning and began a slow crawl across the state. More than 280,000 homes and businesses in Florida were left without electricity as Debby slammed into the state’s Gulf Coast, according to data from PowerOutage.us.

“The hurricane did little to impact production and for exports, as it seemed to miss the key areas, so now it looks more of a threat to the demand side then the supply side,” Flynn added.

Financial firm LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 110.7 billion cubic feet per day (bcfd) this week to 105.2 bcfd next week.

Dutch and British wholesale gas prices extended losses amid geopolitical concerns due to conflict in the Middle East and amid falls in global equity markets. The declines remain smaller than those recorded by global equities markets, as the market was supported by stronger Norwegian supply and as temperature remain above seasonal norms for the first half of August.

Wall Street looked set to plunge at the open as fears of the United States tipping into recession following weak economic data last week rippled through global markets.

Meanwhile, Cheniere Energy LNG.N agreed to supply 0.5 million tonnes per annum of liquefied natural gas to a subsidiary of Galp Energia GALP.LS for 20 years, as deliveries are expected to begin in the early 2030s but are dependent on the approval for an additional liquefaction unit (Train Eight) for Cheniere’s Sabine Pass Liquefaction Expansion Project.
Source: Reuters (Reporting by Rahul Paswan and Brijesh Patel in Bengaluru; editing by Jonathan Oatis)