US natgas futures fall on lower air conditioning demand post-hurricane

US natural gas futures slipped to their lowest in nearly a week on Wednesday as cooler-than-normal weather that followed heavy rains spawned by Hurricane Laura cut demand for air conditioning.

Front-month gas futures fell 4 cents, or 1.6%, to $2.487 per million British thermal units by 10:20 a.m. EDT (1420 GMT). Prices had earlier fallen to $2.415, their lowest since Aug. 27.

Hurricane Laura has reduced demand for natural gas as rains from the storm turned the weather cooler and lowered electric power consumption due to outages, said Thomas Saal, senior vice president of energy at StoneX

As the weather moderates going into the shoulder months, demand can weaken and will be reflected in prices, Saal added.

Laura knocked out power to thousands of homes and businesses in Louisiana, Texas and Arkansas after slamming into the Gulf Coast near the Texas-Louisiana border last week as a major Category 4 storm.

Refinitiv data on Wednesday indicated 144 cooling degree days (CDDs) in the Lower 48 states over the next two weeks, declining from 147 CDDs the previous day. CDDs measure the number of degrees a day's average temperature is above 65 degrees Fahrenheit (18 degrees Celsius) and are used to estimate demand to cool homes and businesses.

Demand in the Lower 48 states is expected to decline as the weather turns cooler, falling from 85.3 billion cubic feet per day (bcfd) this week to 83.8 bcfd in the next, according to Refinitiv.

Meanwhile, producers were ramping up output after there was no significant damage to offshore production facilities from the storm. Natural gas production was down by 25%, or 676.55 million cubic feet per day, on Tuesday.

Enbridge's two natural gas pipelines that connect offshore US Gulf production platforms resumed operation on Tuesday, while Cheniere Energy, the country's top liquefied natural gas exporter, and Sempra LNG were also expected to resume operations after shutdowns last week.