Natural gas prices gained on Monday as damage from Tropical Storm Harvey is seen halting production and pipeline operations.

Futures for September settled up 3.3 cents, or 1.1%, to $2.925 a million British thermal units on the New York Mercantile Exchange.

Harvey made landfall on the Texas coast Friday evening as a Category 4 hurricane, but was downgraded to a tropical storm. The damage from the hurricane, along with subsequent raining and flooding, threatens to disrupt natural gas production in the Eagle Ford shale basin and Gulf of Mexico.

According to Robbie Fraser, commodity analyst at Schneider Electric, the reduced output has pushed domestic output back below 71 billion cubic feet a day, a bullish sign for the market. Natural gas prices have stalled recently as the summer season draws to a close without any significant boost to heating demand, as temperatures have stayed cooler than average across the nation.

Wall Street Journal

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