The Scoop – Historically, hurricanes caused volatility in market pricing. This was before fracking, whereby most of US domestic production came from the Gulf of Mexico. Hurricane Harvey (see below image), has dampened demand as businesses close operations to brace for landfall. This results in a bearish effect on pricing, counter to the past when hurricanes shocked the market upwards.
Strategy Advice – The EIA raised its price projections for ‘18. Consumption growth prediction is 1.8% higher than ‘17 mostly due to a colder winter assumption. Also, rising LNG exports due to Cove Point Maryland facility & Cheniere’s Sabine Pass 4th train being fully operational. This year is the year to lock up long term.