Natural Gas: Hurricane Havoc Starts
2022.06.05 10:25
Generally, the US natural gas prices find an extremely stretched range during the hurricane season – June 1 to Nov.30. Undoubtedly futures are currently trading near the peak of this season which could extend the trading range beyond expectation now.
Last week, the U.S. National Oceanic and Atmospheric Administration (NOAA) predicted this year will be the seventh above-average hurricane season in a row. NOAA forecasters estimate 14 to 21 named storms, six to 10 of which will become hurricanes, with three to six of those developing into major hurricanes during the June 1 to Nov. 30 season.
Last year’s 21 named Atlantic storms cost about $80.6 billion in insured damages in the United States with one storm, Hurricane Ida, accounting for about $36 billion of those losses.
A tropical storm brings sustained winds of at least 39 miles per hour (63 kph) while a hurricane has winds of at least 74 miles mph (119 kph), and major hurricanes – those of at least Category 3 on the five-step Saffir-Simpson scale – pack winds of at least 111 mph (178 kph) and can bring devastating damage.
On Thursday, the remnants of Hurricane Agatha, a Pacific storm that hit Mexico earlier this week, were given a 90% chance of redeveloping and bringing heavy rain and flash flooding to South Florida, the National Hurricane Center said. If it redevelops, the storm would become the first named storm of the 2022 Atlantic season. Undoubtedly, the announcement of weekly inventory resulted in some sell-off, but futures found support at $8.268.
On Friday, futures are trying to form a base at $8.5 as the natural gas bulls look ready to buy dips here above the “Launching Pad” at $8.064.
Undoubtedly, the closing level of this week seems to be the primary indicator of the currently prevailing sentiments in natural gas prices for the upcoming weeks as the southern will remain very warm to hot with highs of the 80s and 90s besides hotter 100s in California to W. Texas.
The rest of the US will be most comfortable with highs of the mid-60s to lower 80s as weather systems with showers track across the interior US to ease national demand to lighter levels. However, national demand will increase mid-next week as the East warms into the 80s to low 90s, while still very warm to hot over the southern US with highs of upper 80s to 100s.
Natural Gas Futures Daily Chart
Technically in a daily chart, futures have found a base at $8.268 once again after testing this support on May 27 and tested a low at $8.107 on May 28 before hitting a weekly high on June 2 at $9.065. Undoubtedly, this sudden surge on June 1 and 2 attracted the bears.
On June 3, futures found buying support at the day’s low at $8.268. Let’s see the closing of this week that could be decisive for defining the further directional moves for the Natural Gas Futures during the upcoming week.
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