Power generation demand, LNG exports and reduced production will combine to push prices higher than the market anticipates.
Front-month natural gas futures rose 11 cents, or 3.8%, to settle at $3.023/MMBtu. That was their first close over $3 since January 2019 and puts the contract up almost 70% from a recent low.
The waterway sits on the Texas-Louisiana border and connects the Gulf of Mexico to Cheniere Energy's Sabine Pass LNG export plant and to oil refineries in Port Arthur and Beaumont, Texas.
Separately, the EIA projected U.S. natural gas output would decline for a third month in a row to 81.8 Bcf/d in November. That would be down over 600 MMcf/d from its forecast for October.
Between Oct. 6 and Oct. 12, a cumulative total of 10.1 million barrels of crude oil production and 9.6 Bcf of natural gas output from the Gulf of Mexico has been shut because of Hurricane Delta.
Front-month natural gas futures rose 14.0 cents, or 5.1%, to settle at $2.881/MMBtu, their highest close since March 2019.
Instead of a 4% reduction for the year, the agency now forecasts a 3% drop.