Jim Krane, a Research Fellow at Rice University’s Baker Institute, told Rigzone in a separate exclusive interview on Tuesday that prices are a bit more sensitive now because so much gas in storage was burned up to keep Americans warm during the cold snap.
Natural gas prices have jumped in recent weeks in all major consuming markets, including in the United States, where prices have soared by more than 160% from this time last year.
U.S. natural gas futures surged to $4.25/MMBtu in Wednesday’s session as Arctic cold boosts heating demand while potential freeze-offs threaten supply. An incoming Arctic blast is driving a surge in heating demand and also fueling concerns over potential production freeze-offs. According to Maxar’s latest forecast models, colder-than-expected temperatures are expected across the central and eastern U.S. through early March. Natural gas demand has been surging, with consumption currently at 122.9 Bcf/d, good for a 21% Y/Y increase.