October natural gas futures were trading slightly lower Tuesday morning at around $2.795/MMBtu as forecasters pointed to a mix of warmer and cooler risks in the overnight data, while Hurricane Florence may threaten demand destruction later this week.

Bespoke Weather Services increased its projected gas-weighted degree day (GWDD) tally overnight on slightly more heat lingering in the medium-range.

“Long-range cold risks remained as well, though could portions of the South appeared enough to limit cooling demand there and offset some of the heating demand additions in the North,” Bespoke said. “Meanwhile, in the medium-range, cooler weather has become increasingly limited to just the far northern tier, letting cooling demand run far above average as heat briefly builds into the South and Southeast.

“We continue to see cold risks dominating into Week 3, which could get heating demand briefly elevated, but also worry that into the second week of October a warmer pattern develops as well.”

Bespoke said it expected natural gas to remain range-bound Tuesday between $2.75 and $2.85, with any bounce from recent tight demand and the overnight GWDD additions likely to fail given “significant Florence demand destruction expected by the end of the week.”

As of Tuesday morning, Florence was about 950 miles east-southeast of Cape Fear, NC, according to the National Hurricane Center (NHC). The hurricane was traveling west-northwest at close to 15 mph.

“On the forecast track, the center of Florence will move over the southwestern Atlantic Ocean between Bermuda and the Bahamas through Wednesday, and approach the coast of North Carolina or South Carolina Thursday,” the NHC said. “Reports from an Air Force Reserve Unit hurricane center aircraft indicate that maximum sustained winds have decreased to near 130 mph with higher gusts.

“However, Florence is still a Category 4 hurricane…Re-strengthening is forecast to occur during the next day or so, and Florence is expected to be an extremely dangerous major hurricane through Thursday night.”

Meanwhile, an explosion reported early Monday on Energy Transfer Partners LP’s Revolution system is not likely to impact markets, according to Genscape Inc. analyst Vanessa Witte.

“Revolution is a gathering pipeline to feed the Revolution processing plant, which will deliver tailgate volumes to” the Rover Pipeline’s Burgettstown Lateral upon startup, Witte said. “There have not been any material scheduled nominations on the Burgettstown Lateral prior to this, however. The explosion seems to be contained to the Revolution pipeline, and there have not been any impacts to interstate operations in the area.” However, it could hinder the ability of molecules to get onto the Burgettstown Lateral going forward, she said.

EBW Analytics Group CEO Andy Weissman pointed to a combination of the pipeline incident and the front month contract’s ability to hold support around $2.76 to explain Monday’s rally.

“The continued strengthening of Hurricane Florence could prove to be a more important issue,” Weissman said. “Florence is likely to make landfall later this week as a strong Category 4 or possibly a Category 5, and spend significant time hovering over the Southeast and Mid-Atlantic states. Widespread power outages and damage to transmission lines are likely.

“Depending upon the strength of Florence, demand destruction could be high — possibly 10 Bcf or more,” he said. “This does not yet appear to be priced into the natural gas market. If it occurs, however, prices could slide further soon.”

Shortly before 9 a.m. ET, October crude oil futures were trading about 17 cents higher Tuesday at around $67.71/bbl, while October RBOB gasoline was trading about 2.2 cents higher at around $1.9816/gal.