Jan 16 (Reuters) -

U.S. natural gas demand for heating and power generation was set to hit a record high on Tuesday, a day after natural gas supplies fell to near a 13-month low as Arctic weather across much of the country froze wells.

Millions of Americans awoke on Tuesday to snow, freezing rain and frigid temperatures as an

extreme cold gripped much of the United States, shutting a U.S. Gulf Coast refinery in Texas and halving North Dakota oil production.

The Texas power grid operator, the Electric Reliability Council of Texas (ERCOT), reduced its peak demand forecast for Tuesday and mustered enough generating supplies to meet sky-high demand due in part to energy conservation efforts by homes and businesses.

Earlier in the week, before the grid operator called on customers to conserve energy, ERCOT had been forecasting that demand for power could exceed supplies during peak hours on Tuesday.

Still, ERCOT set a new all-time winter peak demand record with, breaking the previous one set on Dec. 23, 2022, during the Winter Storm Elliott.

Extreme weather is a reminder of the 2021 February freeze that left millions in Texas and other states in the central U.S. without power, water and heat for days and resulted in more than 200 deaths.

During the February freeze, ERCOT used rotating outages to prevent a grid collapse after an unusually large amount of generation shut due in part to a lack of fuel.

Two other U.S. grid operators, PJM Interconnection and the Southwest Power Pool, stretched their existing cold weather advisories for their operating regions to Jan. 21.

PJM, which is the biggest U.S. grid operator covering parts of 13 states from Illinois to New Jersey, extended its advisory through Sunday for its western region where frigid temperatures were expected to continue.


Financial firm LSEG said U.S. gas production dropped by 14.9 billion cubic feet per day (bcfd) over the past week or so to 92.8 bcfd on Monday, its lowest level since December 2022, due primarily to freeze-offs, when low temperatures freeze wells and other equipment.

That decline, however, was small compared with gas supply losses of around 19.6 bcfd during Winter Storm Elliot in December 2022 and 20.4 bcfd during the February 2021 freeze.

And output is also on track to jump by 2.4 bcfd to a preliminary 95.2 bcfd on Tuesday, making it the biggest one-day gain since December 2022 when daily output jumped by 5.3 bdfd.

At the same time that supplies dropped, U.S. gas demand was on track to jump to 170.8 bcfd on Tuesday from 161.4 bcfd on the Martin Luther King Jr. holiday on Monday, according to LSEG data.

That would top the current all-time high of 162.5 bcfd set in December 2022 during a massive winter storm known as Elliott, according to federal energy data from S&P Global Commodities Insights.

Analysts, however, noted that preliminary data is often revised later in the day.

One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day.

ERCOT said the grid "avoided emergency operations" after urging homes and businesses to conserve electricity on Monday and Tuesday, along with deploying "additional grid reliability tools."

U.S. natural gas company Atmos Energy asked customers in parts of Texas and Mississippi "to continue to conserve gas to help maintain service during this extreme winter weather. The natural gas system is currently experiencing high demand." (Reporting by Deep Vakil in Bengaluru and Scott DiSavino in New York; Additional reporting by Daksh Grover in Bengaluru and Laila Kearney in New York; Editing by Paul Simao and Nick Zieminski)