Saturday, January 28, 2023

Winter storms affect energy production in the US

As a result of Hurricane Elliott, which has affected the country since the end of last week, 37 deaths have already been recorded and the number of power outages has exceeded one million customers.

According to specialized media, oil refining capacity along the coast towards the Gulf of Mexico was reduced by about 1.5 million barrels per day due to freezing temperatures.

Although the production loss is not expected to last long, oil prices maintained the higher prices with which they closed on Friday, in a day of break for the New York Stock Exchange.

West Texas Intermediate crude ended its last trading session at $79.35 a barrel after rising $1.86, or 2.40 percent.

Meanwhile, heating diesel futures gained 4.3 percent and natural gas futures gained 2.5 percent in response to the cold.

Especially in West Texas, one of the areas hardest hit by the storm, gas prices rose 22 percent to nearly $9 per million British thermal units (MMBtu), the highest since the 2021 deep freeze.

There, too, electricity prices rose to $3,700 per MWh, prompting generators to add more power to the grid before prices fell again as thermal and solar supplies came online.

In terms of production, gas production fell by nearly 6.5 billion cubic feet per day (bcfd) and touched a nine-month low of 92.4 bcfd on Friday.

Well-frozen declines in Texas, Oklahoma, North Dakota, Pennsylvania and elsewhere are considered by producers to be the biggest since the February 2021 freeze.

In parallel, Paley reduced the production of the North Dakota oil fields by between 300,000 and 350,000 barrels per day; That is, one third of the normal.

Winter Storm Elliott brought freezing temperatures and extreme weather warnings to nearly two-thirds of the United States, with some areas receiving several days of cold and snow.

Nation World News Desk
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