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Natural gas and electricity networks in the United States have proved resilient during the polar vortex this week, while natural gas futures prices even dropped during one of the coldest snaps in the Midwest in decades.
The natural gas and electric systems across the U.S. have been under less pressure compared to the previous polar vortex in 2014.
PJM Interconnection, the electric grid operator for all or parts of 13 states from New Jersey to Illinois, has reported no realibility issues so far. Natural gas use in the United States hit a record on Wednesday, according to estimates by financial data provider Refinitiv, quoted by Reuters.
Some utilities have urged their customers to voluntarily reduce gas use. Consumers Energy of Michigan urged on Wednesday customers to voluntarily cut gas use as a result of an unexpected incident at a Gas Compressor station in Southeast Michigan. The company also required industrial and large business customers to temporarily curtail processes.
Even before the polar vortex hit, natural gas stocks for the week ending January 25 were 14 Bcf less than this time last year and 328 Bcf below the five-year average, the Energy Information Administration said on Thursday.
Yet, natural gas futures prices for March have been dropping this week while many parts of the U.S. were experiencing the lowest temperatures in decades. As of 11:04 a.m. EST on Friday, natural gas prices were down 0.96 percent at $2.787 per million British thermal units (MBtu).
According to Reuters market analyst John Kemp, traders have been less concerned about natural gas stocks during the winter than they were between September and November, when the Henry Hub natural gas prices soared amid fears that stocks were too low going into the heating season.
The polar vortex is expected to be short-lived and so far, this winter has been warmer than average and about the same as last winter.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.