Wall Street Journal
Gas Prices Steady Despite Deep Freeze

Thursday, January 30, 2014

Freezing temperatures are creating near-record demand for natural gas in the U.S. as shivering Americans turn up the heat and plug in their electric blankets.

Natural-gas prices have jumped in response, topping $5 per million British thermal units for the first time since 2010 as fuel has been pulled from underground storage vaults to keep furnaces running and electric utilities humming.

But compared with past cold snaps, such as in 2000, the price surge has been muted, according to utilities and other big gas users.

That is good news for businesses and consumers. Manufacturers that consume large amounts of the fuel—steelmakers, for example—say they have trouble planning for sharp price changes. And homeowners on fixed incomes can be hit especially hard when utilities raise prices.

The difference today is the U.S. energy boom, which over the past few years has created vast supplies of the fuel, in part through hydraulic fracturing.

Today, there is a lot of "production to build back inventory levels to normal," said Jack Weixel, director of analysis for Bentek Energy, which tracks natural-gas data. "You can climb back onto the horse a lot quicker."  Gas consumption on Tuesday was the second-highest on record, he said, nearly eclipsing the record set Jan. 7.

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