Natural Gas News: Price Climb Faces Resistance at $2.757 Amid Hurricane Concerns

U.S. Natural Gas Prices Rise Amid Hurricane Helene Threat

U.S. natural gas prices climbed on Wednesday as traders monitored Hurricane Helene’s approach, which threatens production in the Gulf of Mexico (GOM). Although Florida is expected to bear the brunt of the storm, market uncertainty has driven price volatility.

As of Wednesday morning at 13:17 GMT, the October Nymex natural gas futures contract increased by $0.082 to $2.633/MMBtu, recovering from the prior day’s 6.2-cent loss.

While production disruptions in the Gulf are anticipated, Florida lacks major natural gas facilities, and the storm could lead to reduced demand due to power outages and cooler temperatures, potentially turning the short-term price bump bearish.

Potential Production Disruptions and Weak Demand

Hurricane Helene is predicted to cause production shut-ins in the Gulf, where output has already dropped to around 99.1 Bcf/d. The National Hurricane Center has upgraded Helene to a Category 3 storm, and its projected path includes parts of Georgia after making landfall in Florida. While the storm could hinder natural gas production temporarily, analysts also anticipate weaker demand in the coming week, largely due to mild weather forecasts across much of the U.S.

According to NatGasWeather, most of the U.S. will experience comfortable temperatures, ranging from the 60s to 80s, with hotter 90s isolated to California and the far southern U.S. The reduced demand outlook, combined with potential power outages from the hurricane, could suppress natural gas usage in key regions.

Technical Levels Indicate Price Resistance

From a technical perspective, natural gas prices face resistance at the $2.757 level, which represents a 50% retracement, with further resistance at the 200-day moving average of $2.794. If prices reach this range, traders may see increased short-selling pressure. On the downside, support levels are seen near the 50-day moving average of $2.294, indicating a potential risk of further declines if the market sentiment turns bearish.

Market Forecast: Bearish Near-Term Outlook

While Hurricane Helene has triggered short-term price gains, the overall outlook for natural gas appears bearish. With the storm likely to reduce demand in Florida due to cooler weather and power outages, any production losses could be offset. Additionally, mild weather across much of the U.S. in the coming week suggests that natural gas demand will remain low, further weighing on prices. Given these factors, the market could face downward pressure after the current storm-related volatility subsides.