U.S. natural gas futures climbed to their highest in nearly two years on Oct. 26 on forecasts for higher heating demand and concerns that Tropical Storm Zeta aiming at the U.S. Gulf Coast could disrupt production.

Front-month gas futures rose 5.3 cents, or 1.8%, to settle at $3.024/MMBtu. Prices earlier rose to their highest since Jan. 25, 2019 at $3.080/MMBtu.

“We are seeing some very cold weather temperatures that will be coming across in the next week, so we are going to see some very strong demand,” said Phil Flynn, a senior analyst at Price Futures Group in Chicago.

Data provider Refinitiv predicted 212 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, higher than the 30-year normal of 204 HDDs.

HDDs measure the number of degrees a day’s average temperature is below 65 F (18 C) and are used to estimate demand to heat homes and businesses.

Refinitiv projected average demand would jump from 97 Bcf/d this week to 97.4 Bcf/d next week.

Concerns that Tropical Storm Zeta, which was poised to turn into a hurricane as it approached the Gulf of Mexico (GoM), would disrupt oil and gas production, was also fueling price gains, Flynn said.

Zeta has already forced the closure of 16% of crude oil and 6% of natural gas production, the U.S. Bureau of Safety and Environmental Enforcement said.

Chevron Corp. has evacuated staff from its U.S. GoM offshore facilities, while BP Plc and Equinor ASA withdrew workers and shut in offshore production ahead of the storm.

U.S. output in the Lower 48 U.S. states was at 87.6 Bcf/d on Oct. 25, Refinitiv said.

Source: Reuters

U.S. Natgas Storage (Bcf)

Week ended
Oct. 23
Week ended
Oct. 16
Year ago
Oct. 23
Oct. 23
+40 +49 +89 +6


Source: Reuters

U.S. Natural Gas Next-day Prices ($/MMBtu)

Hub Current Day Prior Day
Henry Hub $2.91 $2.99
Transco Z6 New York $1.20 $0.78
PG&E Citygate $4.11 $4.18
Dominion South $1.14 $0.67
Chicago Citygate $2.93 $2.96
Algonquin Citygate $1.44 $1.15
SoCal Citygate $3.42 $4.05
Waha Hub $0.86 $0.14