Natural Gas News: Hurricane Francine Stirs Market Uncertainty as EIA Report Looms

Natural Gas Futures Flat Amid Hurricane Francine and Storage Uncertainty

U.S. natural gas futures traded flat on Thursday, as traders weighed conflicting weather reports and the potential impact of Hurricane Francine on Gulf of Mexico production. Market participants are also anticipating the U.S. Energy Information Administration’s (EIA) storage report, due at 14:30 GMT, with a forecasted injection of 46-50 billion cubic feet (Bcf). The 50-day moving average of $2.31 is a key technical level, potentially acting as resistance or triggering an upward move if breached.

At 12:11 GMT, Natural Gas futures are trading $2.299, up $0.029 or +1.28%.

Hurricane Francine Disrupts Gulf Production

Hurricane Francine, expected to make landfall in Louisiana, has sparked concerns over its potential to disrupt natural gas production in the Gulf of Mexico. However, cooler temperatures and the risk of power outages in the southern U.S. may offset some of the storm’s bullish influence on prices, reducing demand. Despite these mixed signals, natural gas futures advanced for a second session on Wednesday, as traders positioned themselves for possible supply disruptions caused by the storm.

EIA Storage Report to Set Market Tone

Ahead of the EIA’s weekly storage report, market expectations suggest an injection of around 46-50 Bcf, down from the five-year average of 67 Bcf. A build in line with this projection would reduce storage surpluses to approximately 300 Bcf, offering some support to prices. Total U.S. storage currently sits at 3,347 Bcf, significantly above last year’s levels and the five-year average, which continues to pressure any sustained upward price movement.

Volatility Continues Amid Supply-Demand Uncertainty

Natural gas production has dipped below 100 Bcf per day, providing underlying support to the market. However, the ample supply overhang, combined with uncertain weather patterns and the threat of demand destruction from Hurricane Francine, leaves traders cautious.

Market Forecast: Cautiously Bullish

The short-term outlook for natural gas is cautiously bullish, with key pivot points at $2.252 and $2.158. The 50-day moving average at $2.31 is critical; any significant disruption to supply could trigger a rally above this level. However, persistent high storage levels and potential demand destruction could cap gains.