Natural gas prices rise on damage from Tropical Storm Harvey
Natural gas prices rose on Monday, August 28, on damage to pipelines and natural gas production from Tropical Storm Harvey. Futures for September rose 1.1%, or 3.3 cents, to $2.925/MMBtu on the NYMEX.
Harvey made landfall on the Texas coast Friday evening as a Category 4 hurricane, but it was later downgraded to a tropical storm.
The slow-moving storm system has dumped 14 trillion to 15 trillion gallons of rainwater on the area over the course of the last five days, leading to massive flooding and damage to energy infrastructure, businesses and homes.
The damage and continued rain threatens to upset natural gas production in the Eagle Ford shale basin and in the Gulf of Mexico.
Robbie Fraser, commodity analyst at Schneider Electric, noted that the production outages have pushed domestic output below 71 Bcfd.
This could prove bullish for the gas market, which has seen no significant boost from cooling demand amid moderate late-summer temperatures.
However, power outages and business closures could also prove bearish for natural gas, according to analysts.
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