February 18, 2021 – Natural Gas Intelligence
Aftershocks of Spot Market Blowouts Felt in Natural Gas Forwards as March, April Prices Climb
By Jeremiah Shelor
Over in West Texas, prompt-month fixed prices at Waha surged 66 cents for the period to $3.376.
Prognosticating the duration of production losses is difficult given that “there’s really not a good historical precedent” for the recent Arctic chill in the Midcontinent and Texas regions, RBN Energy LLC analyst Sheetal Nasta wrote in a recent blog post.
Nasta said it’s simply “never gotten quite this cold” in the region, and what’s more, there weren’t as many molecules being produced the last time the mercury dropped “anywhere close” to recent levels.
Nasta looked to a prolonged stretch of colder temperatures during the 2017/18 winter as a rough analog. At that time, an outbreak of Arctic temperatures, including in parts of Texas, coincided with a drop in Lower 48 production from around 80 Bcf/d to about 72 Bcf/d. This drop occurred over a roughly six-day period.