Since the beginning of the summer, there has been a downward trend in the price of natural gas at Dawn. As at the time of writing, in early October 2017, the spot price is $3.15.
In August and September, the North American continent faced three major hurricanes, including Harvey, which hit the Gulf of Mexico and deep-sea drilling platforms head on. However, unlike the large hurricanes that have already hit this region—for example, hurricanes Dennis, Katrina and Rita in 2005—Harvey did not have a tangible impact on the price of natural gas.
The vulnerability of the gas market in the wake of hurricanes has been significantly reduced by moving production to major continental gas fields such as Marcellus/Utica in the Appalachians. In 2005, gas production in the Gulf of Mexico accounted for 17% of total U.S. production, compared with 4% today. As for Marcellus/Utica, operations began in 2009 and currently represent 28% of total production.
Medium-term price trend
With regard to price forecasts for this winter, the price at Dawn was $3.72 according the financial market on October 4. Canadian storage sites are currently 92% full, which is higher than the average for the past five years. Of course, the severity of the weather this winter will have the last word in determining which path prices will take over the coming months.