With forecast guidance steady overnight and the market continuing to gauge the potential impact of Hurricane Florence as it bears down on the East Coast, October natural gas futures were trading about 1.4 cents higher Wednesday morning at around $2.842/MMBtu.

Overnight forecasts saw only slight shifts, according to Bespoke Weather Services, which made only “subtle adjustments” to its gas-weighted degree day (GWDD) expectations based on the latest guidance.

Guidance “generally trended warmer in the medium-range with less intense cold across the northern tier, though losses in heating demand were offset by increases in cooling demand,” Bespoke said. “Into the long-range we saw some heating demand return as well, though again this came with” cooling demand “losses as generally GWDDs are held in check by seasonality and an expectation that broadly we struggle to see temperatures deviate much from seasonal averages.”

Bespoke attributed some of the recent gains in the October contract to “very significant demand-side tightening,” although the firm noted that Thursday’s Energy Information Administration storage report, which it has pegged at 68 Bcf, “appears quite loose for the market.

“…With very strong physical prices we see room for a bit more of a bounce continuing, but note that significant demand destruction is expected by Friday as Hurricane Florence approaches the Southeast, with physical prices likely to get hit.”

As of 8 a.m. ET, the eye of Florence was about 530 miles southeast of Cape Fear, NC, moving west-northwest at 17 mph and carrying maximum sustained winds of 130 mph, according to the National Hurricane Center (NHC).

“A motion toward the northwest is forecast to begin this afternoon and continue through Thursday,” NHC said. “Florence is expected to slow down considerably by late Thursday into Friday, and move slowly through early Saturday. On the forecast track, the center of Florence will move over the southwestern Atlantic Ocean between Bermuda and Bahamas today, and approach the coast of North Carolina or South Carolina in the hurricane warning area on Thursday and Friday.”

Florence, still a Category 4 hurricane as of Wednesday morning, was expected to strengthen before some weakening on Thursday, NHC said.

Recent major hurricanes that hit the Southeast could provide some useful analogs for predicting the potential demand destruction from Florence, according to a note issued on Wednesday by Genscape Inc. analyst Eric Fell.

Given the strength of Florence, Fell said the similarly powerful Hurricane Irma, which pounded Florida when it made landfall last year, might provide some clues as to what to expect when Florence makes landfall.

“During Irma, power demand in the Southeast fell by around 2.5 Bcf/d from peak-to-trough (mostly in Florida) and total demand destruction in the power sector from Irma was approximately 10 Bcf over a seven day period,” Fell said. “On Sept. 11, 2017, 6.1 million customers in Florida were out of power (59% of the state). This number fell to 2.6 million by Sept. 15 and all the way to 0.2 million (2%) by Sept. 20.

“…At this point, we would expect demand destruction from Florence to be a bit less extreme than that of Irma, as Florida has a larger population and a more gas-intensive power stack than the Carolinas.”

Assessing the potential impact from Florence could by the primary factor driving the market for the rest of the week, according to EBW Analytics Group CEO Andy Weissman.

“We expect a major loss of demand, due to widespread extended power outages,” Weissman said. “Some hedge funds, however, believe that the massive nuclear fleet in the Carolinas could be shut down due to flooding, causing power sector gas demand to soar after transmission service is restored. The outcome will largely determine where prices move next.”

October crude oil was trading about 81 cents higher at around $70.06/bbl, while October RBOB gasoline was trading fractionally higher at around $2.0188/gal.