Estimated U.S. natural gas demand on Jan. 1 hit an all-time high, according to the said the Energy Information Administration, with demand to start 2018 pegged at 150.7 billion cubic feet.
That surpassed the previous single-day record from 2014, according to estimates from PointLogic.
The Polar Vortex that produced colder-than-usual frigid temperatures across much of the U.S. partially led to increased demand for natural gas, Kallanish Energy understands.
EIA said residential and commercial natural gas consumption did not appear to surpass previous records, but higher natural gas consumption in the electric power and industrial sectors, greater exports of natural gas to Mexico and more demand for liquefied natural gas feedstock contributed to the record demand level.
Natural gas consumption is typically highest in the winter months, when residential and commercial demand for heating fuels increases. This past week, increases in demand led to higher prices in natural gas and electricity markets, EIA reported.
Day-ahead natural gas prices for delivery for Jan. 1, 2018, neared $30 per million British thermal units (MMBtu) at trading locations in the Mid-Atlantic Region, New York, and Boston, according to Natural Gas Intelligence.
Because the spot price of natural gas affects power prices in many parts of the U.S., spot wholesale electricity prices also rose, surpassing $200 per megawatt-hour (MWh) in New York City, and $185/MWh in New England, according to data from SNL Energy.
EIA said record demand levels are likely to lead to high withdrawals of natural gas from storage fields. EIA’s Weekly Natural Gas Storage Report showed that in the Lower 48 States, natural gas storage levels as of Dec. 29, were 3.13 trillion cubic feet, roughly 6% lower than both the previous five-year average (2012–2016) and year-ago levels.
In the East region, which covers the Atlantic Coast and some Midwestern states, inventory levels were 740 Bcf, equal to previous year levels and about 5% lower than the previous five-year average.