An intense polar cold snap has shaken the United States, triggering a historic spike in natural gas prices. natural gas prices. The extreme temperatures, which affected key production areas, have disrupted about 10% of the nation’s supply, while heating demand has soared to record levels.
On the New York Mercantile Exchange, futures for February delivery surpassed $6,800 per million BTUs, reaching an intraday high of $7,439, a level not seen since 2022. The March contract also showed a notable increase, rising to $3,898 per million BTU.
Impact of cold weather on natural gas in the U.S.
The extreme cold has forced the shutdown of operations in several producing regions, directly affecting deliveries to liquefied natural gas terminals. liquefied natural gas (LNG) terminals. (LNG) TERMINALS. This sudden drop in U.S. exports has caused alarm in Europe and Asia, where they are also facing a particularly harsh winter.
European prices also reboundedto over 43 euros per megawatt-hour, while storage levels in the European Union fell to less than 46% of capacity, below the average of the last five years.
Pressure on reserves and new import flows
Although the U.S. entered the storm with relatively robust gas inventories, analysts are warning of a draw near 390 billion cubic feet this week, the largest on record so far. In parallel, gas imports gas imports from Canada from Canada increased by about 3 billion cubic feet per day to alleviate the imbalance.
According to ING and EBW Analytics, rising prices have reduced consumption for LNG production. LNG productionand some of the interrupted production is expected to return later in the week. However, demand will remain exceptionally high, especially in key hubs such as Chicago, New England and the benchmark Henry Hub node, where spot prices have exceeded $28, with peaks as high as $48 per million BTU.
Short-term expectations
Although storage levels allow some room for maneuver, the combination of extreme temperatures, logistical disruptions and international pressure will keep energy markets volatile over the next few days. The market expects a gradual normalization as weather conditions improve and production stabilizes.
Source: MSN
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