U.S. Natural Gas Demand Hits Record High Amid Severe Cold Snap

(Reuters) — U.S. homes and businesses used a record amount of natural gas on Tuesday as demand for the fuel for heating and power generation soared during an Arctic blast that also cut gas output to near a 13-month low by freezing wells.

The severe winter storm dumped snow across a broad part of the nation on Tuesday, shutting a Gulf Coast refinery in Texas, triggering malfunctions at others, and halving North Dakota's oil production.

Despite some isolated cold weather problems, the nation's power and gas systems have so far mostly kept the lights on and gas flowing during this storm.

A February freeze in 2021 left millions in Texas and other U.S. Central states without power, water and heat for days and caused more than 200 deaths.

The Electric Reliability Council of Texas (ERCOT), which operates most of the state's power grid, mustered enough generating supplies to meet record winter demand on Monday and Tuesday due in part to energy conservation efforts by Texas homes and businesses.

The last time extreme cold tested the Texas electric system in February 2021, ERCOT was forced to impose rotating power outages to prevent a grid collapse after an unusually large amount of generation shut due in part to a lack of fuel.

As this week's extreme cold moves into the U.S. Northeast, spot power and gas prices in New York and New England jumped to their highest levels since February 2023.

U.S. Gas Demand Hits Record

U.S. gas demand jumped to a preliminary 167.8 billion cubic feet per day (Bcf/d) on Tuesday, financial firm LSEG said. That would top the previous all-time high of 162.5 Bcf/d set in December 2022 during Winter Storm Elliott, according to federal energy data from S&P Global Commodities Insights.

Meanwhile, U.S. gas output dropped by 17.0 Bcf/d from Jan. 8-16 to 90.6 Bcf/d on Tuesday, its lowest since December 2022, according to LSEG, due primarily to freeze-offs, which occur when wells, pipes and other equipment freezes.

That output decline was still smaller than gas supply losses of around 19.6 Bcf/d during Winter Storm Elliot in December 2022 and 20.4 Bcf/d during the February 2021 freeze.

One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day.

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