The NYMEX October front month price rallied to $2.32 US/mm during the day (the highest since July 12, 2024), but ultimately closing at $2.27. Again, prices are hanging along the roof of the channel from the past few weeks, and we’ll see if it breaks out or not. Some volatility during shoulder season is normal.
Hurricane Francine is making landfall tonight, but not in a heavily industrial area. There doesn’t seem to be any serious threat to LNG facilities.
However, there is some discussion about producers shutting in because of the hurricane, which is causing today’s initial rise in prices. I’m not sure if that is accurate because this is not a high production area. More likely that if producers are shutting in (and I’m not sure about even that), then it is because of low prices. Think about the beginning of the year when producers responded to sub $2.00 gas prices by cutting production. Maybe this storm will disrupt some deliveries (I’m always open to possibilities). We will know more tomorrow or Friday. Image from Wunderground
In terms of the hurricane, the rain ought to lower temperatures and reduce cooling demand in the short term. The other effect of a hurricane would be to shut in an LNG plant (Freeport when Hurricane Beryl made landfall) or possibly delaying LNG carriers as they avoid the storm. However, that doesn’t seem to be the case with this storm. And these examples are bearish for the market.
All that being said, prices are up this month. That is a fact, regardless if the hurricane had anything to do with it.
Storage day is tomorrow and preliminary estimates are for an injection of +48 bcf. Injection season is almost over so time to think about Halloween and then winter. [WFG and FM]