Natural Gas News: Hurricane Milton Brings Volatility to Natural Gas Futures

U.S. Natural Gas Futures Drop on Hurricane Milton Demand Impact

U.S. natural gas futures fell sharply as traders priced in potential demand destruction due to Hurricane Milton, which is approaching central Florida. The market is facing downward pressure as it hovers around key technical levels, with prices currently near three support pivots at $2.711, $2.662, and $2.610. The downside momentum suggests natural gas could test the 50-day moving average at $2.540 in the near term.

At17.44 GMT, Natural Gas futures are trading $2.640, down $0.093 or -3.40%.

Hurricane Milton’s Impact on Demand and Production

Hurricane Milton, projected to make landfall as a Category 4 storm late Wednesday or early Thursday, threatens to bring significant damage to Florida, with forecasts of strong winds, heavy rainfall, and life-threatening storm surges. While the storm’s path through the Gulf of Mexico has already resulted in reduced production, potential power outages and cooler temperatures in affected areas are expected to curb demand.

The National Hurricane Center (NHC) has issued multiple warnings, indicating that the hurricane will maintain its strength as it crosses Florida, leading to widespread power disruptions that could further diminish natural gas demand for power generation. The market’s bearish reaction is also driven by forecasts of low overall demand across the U.S. this week, except in areas like California and the Southwest, which are experiencing higher temperatures.

Evacuations and Fuel Supply Disruptions

As the hurricane approaches, nearly 6 million Florida residents are under evacuation orders, with significant preparations underway. Fuel shortages are reported throughout the state, as residents stock up on gasoline for evacuation and generator use. Approximately 23% of Florida’s gas stations have run dry, up from 17% the previous day. The state government has mobilized resources to transport fuel to affected regions, but disruptions could persist.

Meanwhile, tornado warnings across central and southern Florida, including confirmed sightings in Miami and the Everglades, add to the risk of power outages and infrastructure damage, further suppressing natural gas demand.

Short-Term Market Outlook: Bearish

In the short term, natural gas prices are likely to remain under pressure due to the anticipated demand reduction from Hurricane Milton’s impact on Florida. T

he expected decrease in power consumption, combined with mild temperatures across much of the U.S., supports a bearish outlook for natural gas. Should prices break below the 50-day moving average of $2.540, further declines may follow as traders continue to factor in the storm’s demand destruction.