US natgas prices slip

NEW YORK: US natural gas futures slid about 2% to a two-week low on Friday as power generators

burned less gas after Hurricane Milton knocked out power to millions of homes and businesses in Florida.

The price decline came despite a decline in output so far this month and forecasts for the amount of gas flowing to liquefied natural gas (LNG) export plants to increase once Cove Point in Maryland returns to service, which could happen any day now.

Front-month gas futures for November delivery on the New York Mercantile Exchange fell 4.3 cents, or 1.6%, to settle at $2.632 per million British thermal units, their lowest close since Sept. 26.

For the week, the contract was down about 8% after sliding about 2% last week.

Hurricane Milton slammed into the west coast of Florida as a major storm Wednesday night and swept across the central part of the state on Thursday. The storm has now dissipated in the Atlantic Ocean.

There were still around 2.3 million customers without power in Florida from Milton on Friday, down from a high of around 3.4 million on Thursday.

There were also still about 66,000 customers without power in North Carolina and Georgia after Hurricane Helene moved inland after hitting Florida on Sept. 26.

In 2023, power generators in Florida burned a record 3.9 billion cubic feet per day (bcfd) of gas to keep the lights on for the state’s roughly 11.5 million power customers, according to data from the US Energy Information Administration and PowerOutage.us.

That means every 1 million customer outages reduces the need to burn around 0.3 bcfd of gas on average.

Financial firm LSEG said average gas output in the Lower 48 US states fell to 101.2 bcfd so far in October, down from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023.

That is because many producers reduced their drilling activities so far this year after average spot monthly prices at the US Henry Hub benchmark in Louisiana fell to a 32-year low in March. Prices have remained relatively low since then.

Meteorologists projected the weather in the Lower 48 states will remain mostly milder than normal through at least Oct. 26. But even though the weather will be mild, it is still turning seasonally cooler with the coming of winter.

With the seasonally cooler weather, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 96.2 bcfd this week to 96.8 bcfd next week and 98.2 bcfd in two weeks.