In the Weekly Natural Gas Storage Report, the U.S. Energy Information Administration (EIA) found that during the week ending January 10, record-highs were set for the U.S. natural gas market due to cold weather. Temperatures led to record highs in demand, storage withdrawals, and prices.
Net withdrawal from underground, natural storage (287Bcf) was the largest withdrawal in the past 20 years.
Cold weather also impacted natural gas production. According to Bentek Energy, freeze-offs occurred in northeastern Pennsylvania and in Arkansas. Dry natural gas production dropped to 61.9 Bcf on January 8, the lowest since September 2012. As of January 16, production has increased reaching nearly 66 Bcf.
Several pipelines issued critical notices and operational flow orders (OFOs), in the Northeast, to prevent system imbalances. The Texas Eastern Pipeline issued a force majeure, freeing parties from upholding contractual obligations in the event of extraordinary circumstances.
Natural gas prices in the Northeast spiked up to $40 higher than the benchmark Henry Hub price. On Monday prices reached $72.43/MMBtu at Transcontinental Pipeline's Zone 5. According to the report, New York and New England also saw a significant increase. Transco's Zone 6 delivery point, serving New York City, reached $56.59/MMBtu, and the Algonquin Citygate, serving Boston, reached $34.14/MMBtu.
In the Midwest, prices at the Chicago Citygate rose to nearly $10/MMBtu greater than Henry Hub prices on January 3. The ANR Pipeline and NGPL issued OFOs, while other pipelines issued critical notices, curtailing normal gas-flow scheduling to maintain balance.
To read the report, click here
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