According to Bloomberg, gas production in the US steeply went down on December 23. The reason is winter storm Elliot which played havoc with about two-thirds of the US.
The news agency reported that gas production facilities suffered the sharpest intraday cut for the last 10 years in the liquefied natural gas output. Analysts estimate that LNG supplies across the US were trimmed by 2.8 million m3 which is equivalent to 10% of the total LNG output per annum.
Analysts say that the severe storm knocked down the industry because LNG flowing through pipelines turned into ice crystals. Therefore, gas drillers had to shut down part of their gas wells.
Storm Elliot lingered through the Christmas holiday, thus leaving more than 1 million households without power. Interestingly, the abnormal weather, including heavy snowfalls, frigid cold, blustery wind, and black ice affected most of the country. As a result, US air companies canceled almost 3,000 domestic flights.
Unfortunately, weather forecasts do not promise any relief. A sharp frost, fierce wind, and blizzard are likely to persist for a few more days. Thus, governors of several states have introduced appropriate counter-measures to ensure the safety of the population.
Extreme weather alerts boosted nationwide demand for electricity and heat. As a result, LNG demand surged to the highest levels since early 2019, pushing up utility bills. Once gas extraction gets back on track, energy prices will decline to common levels, experts reckon.
