Cold weather leads to record natural gas storage withdrawals

Record breaking cold weather has led to high natural storage withdrawals in the US.

The Energy Information Administration (EIA) has reported that, in the week ending 10^th January 2014, there was net withdrawal of 287 billion ft³ from underground natural gas storage facilities. This is the largest withdrawal for the 20 years for which data exists.

Bentek Energy estimated that stock draws hit 57.1 billion ft³ on 6^th January, and then 67.9 billion ft³ the following day. The next highest draw was 52.9 billion ft³ in February 2011.

High rates of withdrawal were expected to meet surging demand, estimated by Bloomberg to be between 278 and 321 billion ft³.

Meanwhile, cold weather has also negatively impacted natural gas production. According to Bentek Energy, freeze-offs occurred in parts of the Marcellus Shale and in the Fayetteville Shale in Arkansas. Dry natural gas production dropped to 61.9 billion ft³ on 8^th January, the lowest level since September 2012.

As a result, natural gas prices in the Northeast jumped to between US$ 30 and US$ 40 higher than the benchmark Henry Hub price. On the Transcontinental Pipeline’s Zone 5 line prices reached US$ 72.43/million Btu. Prices in New York and New England reached US$ 56.59/million Btu and US$ 34.14/million Btu, respectively.

Adapted from a press release by Emma McAleavey.

Read the article online at: https://www.worldpipelines.com/business-news/20012014/cold_weather_leads_to_record_gas_storage_withdrawals72/