U.S. Gas Storage Withdrawals Set Record
Record-breaking cold weather responsible for natural gas push
The U.S. Energy Information Administration (EIA) said widespread, record-breaking cold weather during the week of Jan. 5-11 pushed natural gas demand, storage withdrawals and prices to record highs.
It said draws from underground gas storage facilities were 287 Bcf (8.1 x 109 m3), “The most during the 20 years for which data exist and the latest in a season already characterized by withdrawals much larger than average.”
EIA said the cold weather impacted production. Wellhead freeze-offs occurred in parts of the Marcellus Shale in northeastern Pennsylvania and in the Fayetteville Shale in Arkansas. U.S. dry gas output dropped to 61.9 Bcf (1.7 x 109 m3) on Jan. 8, the lowest since September 2012, but rebounded to nearly 66 Bcf (1.8 x 109 m3) by Jan. 16.
It said Northeast gas prices spiked to US$30 to $40/MMBtu more than the benchmark Henry Hub price. On Transcontinental Pipeline’s Zone 5 line, which serves Mid-Atlantic customers, prices soared to $72.43/MMBtu.
EIA said Midwestern gas prices are normally closer to Henry Hub prices in periods of high demand since the region does not have major supply bottlenecks. However, prices at the Chicago City gate were almost US$10/MMBtu more than Henry Hub prices on Jan. 3, a day so cold that the Chicago Zoo brought its polar bear indoors.