NEW YORK: US natural gas futures climbed on Friday to a two-week high, with output dropping as energy firms evacuated platforms in the Gulf of Mexico ahead of Hurricane Isaias.
Front-month gas futures for November delivery on the New York Mercantile Exchange rose 5.2 cents, or 1.6 percent, to settle at USD3.22 per million British thermal units (mmBtu), their highest close since September 24.
For the week, the contract gained about 6 percent after losing about 5 percent last week.
In the spot market, mild weather and pipeline issues trapping some fuel in the US Northeast region helped drive next-day gas prices in New England down to their lowest since November 2022.
HURRICANE ISAIAS
The US National Hurricane Center forecast Hurricane Isaias will crash into the Florida Panhandle as a major storm Friday night.
The US Marine Minerals Administration, which oversees development of offshore energy, said about 59 percent or 1.3 billion cubic feet per day (bcfd) of offshore Gulf of Mexico gas was shut in due to Isaias.
Even though storms can boost gas prices by cutting output along the US Gulf Coast, analysts have said such weather is more likely to reduce prices and gas demand by shutting LNG export plants and knocking out power to homes and businesses. About 40 percent of US power generation comes from gas-fired plants.
Most US production comes from shale formations located far from the Gulf Coast. Just 1.9 bcfd, or 2 percent, of the 118.4 bcfd of US marketed gas production in 2025 came from the federal offshore Gulf of Mexico, according to the US Energy Information Administration.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the US Lower 48 states slid from record highs of 113.3 bcfd in August and September to 111.0 bcfd so far in October due to a combination of Isaias shut-ins and force majeures and other problems on pipelines in Kentucky, Texas, West Virginia and elsewhere over the past month or so.
On a daily basis, LSEG said output was on track to drop even further to a four-month low of around 108.4 bcfd on Friday.
LSEG said average gas demand in the Lower 48 states, including exports, will slide from 106.6 bcfd this week to 104.1 bcfd next week before jumping to 108.3 bcfd in two weeks with the coming of seasonally cold weather. Those forecasts were similar to LSEG’s outlook on Thursday.
Average gas flows to the nine major US LNG export plants fell to 17.1 bcfd so far in October, down from 18.0 bcfd in September and a monthly record high of 18.8 bcfd in April.
The LNG feedgas decline so far this month was due mostly to the delayed restart of a liquefaction train at Freeport LNG’s 2.4-bcfd plant in Texas since October 2 and planned annual maintenance at Berkshire Hathaway Energy’s 0.8-bcfd Cove Point in Maryland since September 19. Energy traders have said they expect both plants to return to full service soon.
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