NEW YORK: US natural gas futures fell to their lowest in nearly a week on Wednesday as cooler-than-normal weather after heavy rains spawned by Hurricane Laura cut demand for air conditioning.
Front-month gas futures fell 4.1 cents, or 1.6%, to settle at $2.486 per million British thermal units. Prices had earlier fallen to $2.415, their lowest since August 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.
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 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.-
Comments
Comments are closed for this article.