The big freeze: The polar vortex squeezed the US gas market, driving regional hub prices to triple digit, record highs by the end of last week.
The Arctic Blast hit primarily the Western and Midcon markets, with OGT in Oklahoma seen intraday prices trading at $600/mmbtu, an all time record. In the Permian, Waha climbed to $162/mmbtu, and in California, SoCal citygate prices traded at over $140/mmbtu. Chicago citygate prices soared to above $120/mmbtu.
The cold spell, combined with low wind speeds drove up gas-fired powgen by ~40% through the course of last week. at the same time, the cold temperatures resulted in wellhead freeze-offs, reducing Midcon production by over 10%, further tightening supply.
Record-breaking gas prices translated into record high power prices, with ERCOT North rocketing to above $3000/MWh.
What is your view? How will the situation evolve in the US in the coming days? The cold spell is set to continue in the coming days and we could well see total US gas demand climbing to a record 170 bcf/d…
Source: Greg Molnar
See original post by Greg at LinkedIn.