Natural Gas News: Storm Shut-Ins Spark Short-Covering as Storage Caps Rally
Natural gas futures rose on Friday as Hurricane Isaias forced Gulf producers to shut down operations, prompting short-covering in the market. Despite the supply disruption, warm weather forecasts through mid-October are expected to limit demand and keep price rallies in check.
Why it matters
Energy market volatility driven by weather events directly affects utility costs and industrial production levels.
Short Covering Held Friday, but the Storm Did All the WorkNatural gas futures were sharply higher on Friday and back on the strong side of the key retracement area.Hurricane Isaias forced Gulf producers to shut in output and the market found buyers on the back of it. That gave the shorts a reason to cover going into the weekend after Thursday’s storage report nearly cracked the lows. The warm forecast through mid-October may be keeping the rally from running.November natural gas futures settled at $3.220, up $0.052 or 1.64%.59% of Gulf Output Went Dark FridayHurricane Isaias was approaching the Gulf Coast Friday with producers pulling workers and shutting in production. The Marine Minerals Administration said 1.259 billion cubic feet per day of Gulf natural gas output was offline by Friday afternoon.
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