EIA Quantifies US Winter Storm Impact
The US Energy Information Administration (EIA) has quantified the impact of this week’s polar vortex weather event in the Lower 48 states, including soaring commodity prices, falling production and high storage withdrawals.
In its February 18 Natural Gas Weekly Update, the EIA cited trade media data showing sharply higher natural gas prices at many trading hubs, including a February 17 average price at the Oneok Gas Transmission pipeline in Oklahoma of $1,192/mn Btu, the highest in the country and the highest price ever recorded at any hub. At the Waha hub in Texas, natural gas spiked to more than $206/mn Btu on February 16 and averaged $64.22/mn Btu on February 17, while the price at the Chicago City Gate spiked to a record high of nearly $130/mn Btu on February 12.
Physical spot prices were also impacted: the benchmark price at the Henry Hub in Louisiana spiked to $23.61/mn Btu on February 17 from $3.68/mn Btu on February 10. Adjusted for inflation, the February 17 spot price was the highest since February 2003, the EIA said.
As Uri descended across the US beginning late last week, temperatures plunged to record lows and dry natural gas production fell rapidly, to about 69.7bn ft3/day on February 17 from 90.7bn ft3/day on February 8. Permian Basin production was especially hard hit, falling more than 10bn ft3/day during the February 8-17 period.
Average weekly demand for gas, meanwhile, rose to the second highest level on record, pushing total US consumption 12% higher in the week ended February 17, to 128.9bn ft3/day – just 2bn ft3/day below the weekly record set in late December 2017.
As temperatures dropped along with Uri’s arrival, the draw on US stored gas inventories climbed, the EIA said, with net withdrawals reaching 237bn ft3 in the week ended February 12, up from 171bn ft3 the previous week and 67% higher than the five-year average of 142bn ft3.