U.S. natural gas futures soared by a record 89% over five days to a three-year high on Monday after an Arctic blast at the weekend froze oil and gas wells, cutting gas production to a two-year low on Sunday.
On Monday, front-month gas futures for February delivery on the New York Mercantile Exchange (NYMEX) rose 64.3 cents, or 12.2%, to $5.918 per million British thermal units (mmBtu), putting the contract on track for its highest close since December 2022.
Financial firm LSEG said average gas output in the Lower 48 states dropped to 106.9 billion cubic feet per day (bcfd) so far in January, down from a monthly record high of 109.7 bcfd in December.
On a daily basis, output was on track to rise to 95.5 bcfd on Monday from a two-year low of 92.6 bcfd on Sunday due mostly to freezing wells in Texas and Louisiana, according to LSEG data. That compares with a recent high of 110.0 bcfd on January 12 and an all-time daily high of 111.2 bcfd on December 21.
That means output fell about 17.4 bcfd from January 13-25. In past winters, freezing wells, known as freeze-offs in the energy industry, have slashed gas output by massive amounts, including the loss of around 17.2 bcfd from January 8-16 in 2024, cuts of 15.8 bcfd from December 20-24 in 2022, and a drop of 20.4 bcfd from February 8-17 in 2021, according to LSEG data.
(Reporting by Scott DiSavino; Editing by Kirsten Donovan)