October Nymex natural gas futures (NGV26) rose more than 9% on Thursday, September 24. They reached a 2.5-month high.
The rally followed TC Energy’s force majeure declaration on its Columbia Gas Transmission pipeline in Appalachia. The company cited an unexpected mechanical issue at the Saunders Creek Regulator Station in West Virginia.
The outage disrupted an estimated 1.8 billion cubic feet per day (Bcf/d) of natural gas transportation service. That volume represents approximately 1.6% of total U.S. supply.
The supply constraint prompted significant investor short-covering. It added to declining regional production as producers scaled back ahead of the fall season.
Futures gave back some gains the following day as traders took profits and reassessed the situation. TC Energy crews were working on repairs. The company expected the force majeure to remain in effect through the weekend.