U.S. natural gas starts the week on the back foot; Harvey in focus

U.S. natural gas futures started the week on the back foot on Monday, as market participants digested the impact of Hurricane Harvey on the U.S. Gulf Coast.

U.S. natural gas for October delivery was at $2.901 per million British thermal units by 8:45AM ET (1245GMT), down 2.3 cents, or around 0.8%. Prices ended mostly flat last week.

Harvey came ashore over the weekend as the most powerful hurricane to hit Texas in more than 50 years, killing at least two people and causing large-scale flooding.

The U.S. National Hurricane Center (NHC) said on Monday that Harvey was moving away from the coast but was expected to linger close to the shore through Tuesday. The storm is expected to track towards Louisiana mid-week and then finally eject over the East late in the week.

Comfortable temperatures will continue over the central and east-central U.S. in the next five days, with highs only in the 70s to lower 80s as weather systems sweep through.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on late-summer cooling demand.

Nearly 50% of all U.S. households use gas for cooling.

Total natural gas in storage currently stands at 3.125 trillion cubic feet, according to the U.S. Energy Information Administration, 6.7% lower than levels at this time a year ago but 1.4% above the five-year average for this time of year.

Early market expectations for this week’s storage data due on Thursday is for a build in a range between 26 and 36 billion cubic feet in the week ended August 25.

That compares with a gain of 43 billion cubic feet in the preceding week, a build of 51 billion a year earlier and a five-year average rise of 67 billion cubic feet.