Natural gas prices surge as Ingrid roils Gulf of Mexico

Natural gas prices shot up on Monday after Tropical Storm Ingrid roar ashore in Mexico and threatened to disrupt production in the southwestern Gulf of Mexico before moving further inland.

On the New York Mercantile Exchange, natural gas futures for delivery in October traded at USD3.7370 per million British thermal units during U.S. trading, up 1.62%. 

The October contract settled up 1.07% at USD3.667 per million British thermal units on Friday.
The commodity hit a session low of USD3.628 and a high of USD3.749.

Hurricane Ingrid over the weekend meandered across the southwestern Gulf of Mexico before weakening to a tropical storm as it went ashore in northern Mexico.

Investors viewed the storm as dangerous enough to disrupt natural gas production in the area.
Tropical weather systems often disrupt production by prompting gas rig operators to evacuate offshore facilities.

The Gulf of Mexico is home to 10% of U.S. natural gas production.

Supply data released last week bolstered prices as well.

The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ended Sept. 6 rose by 65 billion cubic feet, below market expectations for an increase of 66 billion cubic feet.

Inventories increased by 27 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 62 billion cubic feet.

Total U.S. natural gas storage stood at 3.253 trillion cubic feet as of last week. Stocks were 172 billion cubic feet less than last year at this time and 46 billion cubic feet above the five-year average of 3.207 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 114 billion cubic feet below the five-year average, following net injections of 49 billion cubic feet. 

Stocks in the Producing Region were 106 billion cubic feet above the five-year average of 993 billion cubic feet after a net injection of 14 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in November were down 0.79% and trading at USD106.69 a barrel, while heating oil for October delivery were down 1.00% and trading at USD3.0825 per gallon.