US natural gas futures settled near a three-week low on Tuesday on expectations mild weather over the next two weeks will keep demand low.
Front-month gas futures for November delivery on the New York Mercantile Exchange rose 0.4 cents, or 0.2 percent, to settle at $2.498 per million British thermal units (mmBtu). On Monday, the contract closed at its lowest since Sept. 20.
One factor weighing on prices in recent weeks has been a reduction in the amount of gas power generators burned after Hurricanes Milton and Helene knocked out electric service to millions of homes and businesses.
There were still about 172,000 customers without power in Florida from Milton, which hit the state on Oct. 9, and 12,000 out in North Carolina from Helene, which hit Florida on Sept. 26 before moving inland.
In total, Milton caused around 3.4 million customers to lose power, while Helene caused roughly 6 million outages.
The US National Hurricane Center, meanwhile, projected there was a 50 percent chance that a disturbance in the Atlantic Ocean would strengthen into a tropical cyclone over the next week as it moves toward Puerto Rico and the Bahamas.
Financial firm LSEG said average gas output in the Lower 48 US states slid to 101.4 billion cubic feet per day (bcfd) so far in October from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023.
Many producers reduced drilling activities after average spot monthly prices at the US Henry Hub benchmark in Louisiana fell to a 32-year low in March. Prices have remained relatively low since then.
On a daily basis, output was on track to drop by 1.6 bcfd to a preliminary four-month low of 100.4 bcfd on Tuesday. Analysts noted that preliminary data is often revised later in the day.
Energy analysts blamed part of the daily output decline on planned maintenance on Kinder Morgan’s El Paso Natural Gas pipe, which transports gas from the San Juan, Permian and Anadarko basins to California.
Meteorologists projected the weather in the Lower 48 states will switch from colder than normal through Oct. 17 to mostly warmer than normal from Oct. 18-30.
