As traders contemplated severe damage in Florida from Hurricane Ian, natural gas futures declined early Thursday ahead of the latest round of government inventory data. The November Nymex contract was off 16.3 cents to $6.792/MMBtu as of around 8:55 a.m. ET.

After carving a devastating path through Florida, causing severe flooding and reportedly leaving millions without power, Ian had been downgraded to tropical storm status as of early Thursday.

As of 8 a.m. ET, Ian was about 40 miles east of Orlando, FL, and carrying maximum sustained winds of 65 mph, the National Hurricane Center (NHC) said.

“On the forecast track, the center of Ian is expected to move off the east-central coast of Florida soon and then approach the coast of South Carolina on Friday,” the NHC said. “The center will move farther inland across the Carolinas Friday night and Saturday.”

The “devastating outages” from Ian could contribute to downward pressure for the November Nymex contract, according to EBW Analytics Group analyst Eli Rubin.

As of early Thursday, reported more than 2.5 million Florida customers without electricity.

“Damage has been extensive and with power outages numerous,” NatGasWeather observed. “…With the hurricane being slow moving, damage from wind, heavy rain and storm surge will be impressive,” suggesting “many areas will be without power for days to weeks. We continue to view overall impacts leaning bearish barring a surprise.”

Meanwhile, traders will also be looking to the latest Energy Information Administration (EIA) storage report to gauge the supply/demand balance as the heating season approaches. 

Major polls show analysts expecting a build in the 90s Bcf, perhaps higher, for EIA’s 10:30 a.m. ET report, which covers net changes to U.S. inventories during the week ended Sept. 23.

Results of Bloomberg’s survey showed a median injection projection of 93 Bcf, with estimates ranging from 85 Bcf to 107 Bcf. Reuters’ poll produced injection estimates that spanned 80 Bcf to 105 Bcf. It landed at a median of 95 Bcf.

For the year-earlier period, EIA recorded an injection of 86 Bcf. The five-year average injection is 77 Bcf. For the week-earlier period, EIA posted a 103 Bcf injection that overshot pre-report expectations.

“This morning’s EIA report could be particularly important due to last week’s bearish surprise and the November contract’s search for direction,” EBW’s Rubin said. “…While we favor a smaller build, the risk of a second elevated injection could trigger another retest of support at the 200-day moving average of $6.54.”