The Upper Midwest market has become the crossroads of America for natural gas, and finding that sweet spot helped the region get through a record-breaking freeze without breaking the bank. Chicago demand reached an all-time high of 10.65 Bcf January 30, but cash prices in the region experienced a decline as inflows ramped up to add bearish sentiment. At the same time, inflows to the Central region increased by approximately 1.04 Bcf on the day to 16.3 Bcf, according to Platts Analytics. The last time inflows to the region were greater was February 27, 2015, when they were 16.49 Bcf. The cash price for Chicago city-gates fell $2.43/MMBtu to $4.995/MMBtu January 30. The bearish sentiment can be connected to robust inflows from the Northeast, the Rockies and Western Canada. Last year the response to a period of high winter demand was very different. Chicago city-gate sat at $9/MMBtu on January 2 2018. At that time, Chicago demand was approximately 9.89 Bcf, about 76 MMcf lower than the new record high of 10.65 Bcf, according to Platts Analytics. When Chicago city-gate reached the $9/MMBtu last year, inflows from the Northeast into the Upper Midwest were 2.03 Bcf. By comparison, Northeast inflows were… continue reading
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Source: CTRM Center