Cold weather brings near record natural gas spot prices – Today in Energy
Natural gas spot prices at several trading centers briefly approached record highs during the week of February 14 amid significant backdrop colder than normal weather which affected most of the lower 48 states. The cold weather caused imbalances between supply and demand for natural gas. Natural gas production has declined due to frosts (temporary interruptions in production caused by cold weather) due to high demand for heat and electricity. At the benchmark Henry Hub, natural gas prices hit $ 23.86 per million British thermal units (MMBtu) on February 17, the highest actual (inflation-adjusted) price since the explosion in the ‘Arctic February 25, 2003. Henry Hub prices averaged $ 5.49 / MMBtu in February, the highest monthly average since February 2014.
Source: US Energy Information Administration, based on Natural gas intelligence The data
Many regional natural gas malls also achieved very high spot prices. As of mid-February, 105 of 178 natural gas price points recently reached high prices, according to data from Natural Gas Intelligence (NGI). The high prices occurred mainly in the southern, southwestern and midwestern regions of the United States.
The Permian Basin in West Texas has been significantly affected by the frosts. The spot price at the nearby Waha Hub hit $ 206.19 / MMBtu on February 16, compared to an average of $ 2.83 / MMBtu during the first week of February. Southern California has also seen higher prices, as a significant portion of its natural gas supply comes from the Permian Basin. The price at Southern California (SoCal) Citygate hit $ 144.00 / MMBtu on February 12. By comparison, the daily price at Pacific Gas and Electric (PG&E) Citygate, located in Northern California, was considerably lower at $ 6.25 / MMBtu as Northern California receives more. of its natural gas from the Rocky Mountains and Western Canada.
In Oklahoma, Oneok Gas Transmission (OGT) hit what could be the highest natural gas price of any natural gas hub in history with an average of $ 1,192 / MMBtu on February 17, according to the data from NGI. The spot price at OGT was $ 2.91 / MMBtu during the first week of February.
High spot prices in the United States were short lived. As temperatures rose, easing supply constraints and tempering demand, spot prices for natural gas at the Henry Hub quickly began to drop to pre-cold snap levels, reaching $ 2.84 / MMBtu on February 22.
Main contributor: Stephen york