The deep freeze hit Texas’ energy industry, shutting refineries and forcing restrictions on natural gas pipeline operators, while leaving over 4 million people without power.
U.S. natural gas futures jumped more than 10% on Feb. 16 to an over three-month high as a frigid blast across the United States disrupted pipeline flows and pushed up heating demand.
Front-month gas futures gained 27.5 cents, or 9.4%, to $3.187 per million British thermal units (MMBtu) at 9:30 a.m. EST, having earlier hit a peak since Nov. 5 at $3.214 per MMBtu.
“The extreme cold that we’ve seen in Texas, in the Midcontinent, has wreaked havoc and not only do you have a situation where demand for natural gas is extremely high, production has been shut in because the pipelines are frozen,” said Phil Flynn, a senior analyst at Price Futures Group in Chicago.
“Long-term, we’re showing a much more bullish underlining market right now,” he added.
The deep freeze hit Texas’ energy industry, the country’s largest crude-producing state, shutting refineries and forcing restrictions on natural gas pipeline operators, while leaving over 4 million people without power.
Data provider Refinitiv estimated 425 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, slightly down from the Feb. 15 forecast of 449 HDDs.
The normal is 377 HDDs for this time of year. HDDs measure the number of degrees a day’s average temperature is below 65 F (18 C). The measure is used to estimate demand to heat homes and businesses.
Meanwhile, Refinitiv projected average demand, including exports, would rise to 147.0 billion cubic feet per day (Bcf/d) this week but slip to 123.2 Bcf/d next week, while staying above the five-year average of 107.2 Bcf/d.
Data provider Refinitiv projected output in the Lower 48 to average 82.5 billion cubic feet per day (Bcf/d) this week and increase to 84.2 Bcf/d next week.