By Ketki Saxena
Investing.com -- Natural gas futures slid lower early Tuesday, after being bolstered on Monday by forecasts for significantly colder weather and robust heating demand.
Futures slid over 10% as of midday today as subtropical storm Nicole heads towards Florida’s east coast.
Subtropical storm Nicole is on track to approach Florida’s east coast late Wednesday before moving over central and northern Florida and eventually reaching southern Georgia. Nicole’s arrival could cause demand destruction in the physical market, as storms typically result in power outages that reduce demand for gas-fired generation.
Natgas futures did however gain some support from a decline in output so far this month. As per Refinitiv, natural gas output in the U.S. Lower 48 states has fallen to 98.4 bcfd so far in November, down from a record 99.4 bcfd in October.
Natgas prices also gained some support from expectations the Freeport LNG export plant in Texas would return to service soon, following a shutdown on June 8 caused by a pipeline explosion. The 2.1 billion bcfd export plant is expected to return to at least partial service in November.
Up next for the commodity, cold conditions next week are expected to boost weather-driven demand for the Nov. 11-17 storage period.
With the winter incoming, Refinitiv projects average U.S. gas demand including exports to jump from 98.4 bcfd this week to 121.2 bcfd next week.