The demand for US natgas is expected to reach a record high on Tuesday
The U.S. demand for natural gas is expected to hit a record on Tuesday as the extreme cold that has affected much of America puts pressure on power grids, and certain oil and gas operations.
Last week, the February natural gas contract reached its highest price since December 30, 2022. The cold weather that accompanied the weekend had the potential to reduce output due to the freezing of gas wells and pipelines. However, it also increased the use of fuel for heating homes and businesses.
Prices rose in several hubs on the spot market with the U.S. Henry H Hub benchmark.
LSEG, a financial firm, predicts that total gas consumption, including exports will rise to 166.9 bcfd Monday, and to 170 bcf bcfd Tuesday. If this happens, the demand for gas on January 21 will surpass the daily record of 168.4 Bcfd that was set on Jan. 16, 2020.
Zhen Zhu is a managing consultant with C.H. Guernsey and Company, Oklahoma City.
The state pipeline authority reported that North Dakota's associated wellhead gas production on Monday was down by 0.35-0.43 billion cubic feet per day (bcfd) due to the extreme cold.
Electric Reliability Council of Texas, which operates the grid in most of Texas, has issued a weather warning for the period Jan. 20-23 because of extreme cold. ERCOT said that it expected normal grid conditions to continue during the weather watch.
PJM interconnection, America's largest power grid, which oversees 13 states, from Illinois to New Jersey in whole or part, has issued a cold-weather alert for the period of Jan. 20-22. The electricity demand is expected to reach its highest level ever during winter.
CenterPoint Energy, a Houston-based energy company, said Monday that it has activated three staging sites and its emergency operations centre in preparation for possible power outages due to Winter Storm Enzo.
The financial firm LSEG reported that the average gas production in the Lower 48 U.S. States fell from 104.2 billion cubic feet per day in December to 103 bcfd in January, mainly due to freezing-offs. Reporting by Anmol Chaubey, Bengaluru. Editing by Andrea Ricci
(source: Reuters)