((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto)) by Anmol Choubey
Demand for natural gas in the United States is on track to hit a record high Tuesday, as extreme cold hits much of the United States, straining power grids and some oil and gas operations.
The February natural gas contract NGc1 closed at its highest level since December 30, 2022 last week, as cold weather over the weekend was poised to reduce production by freezing wells and gas lines and by increasing the use of fuel to heat homes and businesses.
In the spot market, prices rose in several hubs, with US benchmark Henry Hub NG-W-HH-SNL in Louisiana more than doubling from Friday to $9.86 per MMBtu. Transco Z6 in New York NG-CG-NY-SNL increased more than nine-fold from Friday to 42.855 MMBtu.
Finance company LSEG forecasts that total gas consumption, including exports, will reach 166.9 billion cubic feet per day on Monday and 170 billion cubic feet per day on Tuesday. If that happens, demand on January 21 would exceed the current daily record of 168.4 billion cubic feet, reached on January 16, 2024.
“Production will be reduced due to freezing of wellheads, although at this stage it is difficult to estimate how much gas will be withdrawn,” Zhen Zhu, management consultant at CH Guernsey and Company told Oklahoma City.
-Natural gas production associated with the North Dakota wellhead was estimated at 0.35-0.43 bcfd Monday, due to extreme cold, the state’s pipeline authority said.
The Electric Reliability Council of Texas (ERCOT), which manages the power grid for most of the state, has issued a weather watch for the period January 20-23 due to the extreme cold. ERCOT, however, said it expects normal grid conditions during a weather watch.
PJM Interconnection, the nation’s largest power grid, which covers all or parts of 13 states from Illinois to New Jersey, has issued a cold weather alert for the period Jan. 20-22, with electricity demand expected to reach an unprecedented winter peak.
CenterPoint Energy CNP.N has activated its emergency operations center and three preparedness sites in preparation for possible power outages due to Winter Storm Enzo, the Houston-based company said Monday.
Financial firm LSEG said average gas production in the lower 48 US states fell from 104.2 billion cubic feet per day (bcfd) in December to 103 bcfd so far in January, mainly due to freezing conditions. .
Related News :