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Gas sellers reaped billion texas freeze9/12/2023 "That's what happens when you go from a very well supplied market to a very tight market, and in this case a catastrophically tight market," said one natural gas trader. 11 into the hundreds of dollars, with Tulsa's hub surging to a record $1,192.86 on Feb. Graphic: Texas gas prices soars during February freeze - Īt the beginning of February, gas prices ranged from $2.50 to $3 per million British thermal unit (mmBtu) at hubs from Houston to Tulsa, Oklahoma. Chief Executive Bernard Looney said he wanted to "deftly avoid" giving an exact number for the trading division's results. Anticipating high demand, Kinder Morgan said it dispatched workers and backup generators ahead of the storm to its gas storage and pipeline facilities.Ī source close to BP said gas trading contributed hundreds of millions of dollars to the company's first quarter results. Kinder Morgan, another gas storage and pipeline operator, earned about $1 billion during the storm, the vast majority from higher gas prices and sales. Rival Enterprise Products Partners said the storm led to gains of about $250 million in the first quarter. BofA did not respond to a request for comment.Įnergy Transfer did not comment for this story. The Federal Energy Regulatory Commission is reviewing gas and power markets for potential market manipulation. Utilities are complaining of price gouging and of unwarranted supply cancellations. The week-long output loss cost shale producer Pioneer Natural Resources $80 million, Chevron about $300 million, and Exxon Mobil $800 million. Losers include producers that could not deliver oil and gas due to frozen wellheads, gathering systems and processing stations. It is possible that some companies may never collect on those sales due to ongoing litigation, however. The firms combined stand to reap billions of dollars in profits by selling gas and power during the storm, according to interviews and reviews of public documents. The biggest winners were companies with access to supplies, including leading energy trader Vitol, gas suppliers Kinder Morgan, Enterprise Products Partners and Energy Transfer, oil giant BP plc, and banks Goldman Sachs, Bank of America (BofA) and Macquarie Group. But a clearer picture is emerging from quarterly earnings and as utility companies smarting from big bills sue to recoup their losses. Demand for heat pushed wholesale power costs to 400 times the usual amount and propelled natural gas prices to record highs, forcing utilities and consumers to pay exorbitant bills.Īfter the storm, few companies wanted to talk about their financial gains, unwilling to be seen as profiting off others' hardships. also said they gained.The deep freeze caught Texas's utilities off-guard, killed more than 100 people and left 4.5 million without power. Pipeline operators Energy Transfer LP and Oneok Inc. The Sydney-based investment bank raised its profit forecast last month, implying a windfall of as much as $210 million, as it cited increased demand for gas- and power-supply services. The price swings benefited companies including Macquarie Group Ltd., the second-biggest physical gas supplier in the U.S. In Oklahoma, gas traded at more than 300 times normal levels, while electricity in Texas surged to $9,000 per megawatt-hour. state for the better part of a week.Īs traders and power suppliers struggled to find gas during the height of the disaster, prices skyrocketed. It’s just the latest detail to surface in the slowly emerging picture of financial winners and losers from the crisis that killed 57, left millions in the dark and paralyzed the second-largest U.S. “We ended up shutting in fields, shutting down gas requirements where we’re buying gas and pushing that gas back to the So-Cal border and, yes, we did do some optimization that benefited the bottom line.” “We did see an opportunity in the market to capture some of that gas-trading revenue,” Interim Chief Executive Officer Mark McFarland told analysts and investors during a conference call Thursday. ![]() (Bloomberg) - California’s largest oil producer emerged as the latest financial winner from last month’s historic Texas freeze that left millions without heat or electricity for days.Ĭalifornia Resources Corp., which drills and produces crude exclusively in the Golden State, said its natural gas trading business generated a profit as a result of the storm, though the magnitude of the bonanza won’t be disclosed until the quarter is out.
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