Icy weather cuts U.S. natgas output to seven-month low

U.S. natural gas production on Wednesday was on track to drop to its lowest daily total since July as extreme cold blanketed much of the country, freezing gas wells in Texas and other producing states, according to energy traders and data from Refinitiv. 

The output drop reminded energy market of last year's February freeze when Winter Storm Uri killed over 200 people in Texas, caused power and gas prices to spike to record highs and left millions of homes and businesses without heat and power for days. 

Since then, several Texas agencies required power and gas companies to winterize equipment and coordinate efforts to keep the lights on and gas flowing during extreme cold.

Lingering cold so far this year has already depressed output through well freeze-offs and other weather-related equipment issues in several regions, including the Permian in Texas and New Mexico, the Bakken in North Dakota and Appalachia in Pennsylvania, West Virginia and Ohio.

High temperatures in the West Texas town of Midland in the Permian basin will drop from 38°F (3.3°C on Wednesday to 25 on Thursday, which would be the coldest day of the winter, before rising to 36 on Friday and 45 on Saturday, according to AccuWeather forecasts. That compares with a normal high of 63°F at this time of year. 

Refinitiv said average U.S. output fell from a monthly record of 97.3 Bft³d in December to 92.9 Bft³d in January and 92 Bft³d so far in February. 

On a daily basis, output on Wednesday was on track to drop to 90.4 Bft³d, the lowest in a day since July, according to preliminary data from Refinitiv, with most of the declines expected in Texas, New Mexico, West Virginia, Oklahoma and Colorado. 

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