The extraordinarily harsh blast of frigid temperatures blanketing much of the Lower 48 crippled power grids and sent natural gas spot prices soaring on Tuesday, extending a surge that began the previous week. Futures also jumped Tuesday amid widespread reports of rolling blackouts and production freeze-offs.

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According to Tuesday’s MidDay Price Alert, NGI’s Spot Gas National Avg. was up $21.315 to $86.745, with prices at OGT in Oklahoma shooting as high as $999.000/MMBtu and averaging $918.625, up $544.105. Earlier this month, OGT was trading below $3.00.

In Texas, prices at midday were up $238.835 to $400.000 at Houston Ship Channel, and ahead $55.280 to $204.680 at the Waha hub.

The March Nymex futures contract settled Tuesday at $3.129/MMBtu, up 21.7 cents day/day.  

Power outages left an estimated 5 million Americans without electricity Tuesday morning, according to data compiled by Poweroutage.us. Low temperatures early Tuesday hovered near zero as far south as central Texas and around 30 below in the northern Plains. Suppliers throughout the nation’s midsection used rolling power cuts to ease demand and ward off network crashes.

“With bitterly cold air dropping all the way down to the Gulf Coast, the natural gas market is experiencing some of its most chaotic conditions ever,” said Andy Weissman, CEO of EBW Analytics Group.

National Weather Service forecasts called for continued frigid temperatures into Wednesday before a gradual warming trend later in the week.

In Texas, where the power grid is structured to combat summer heat, the rare winter freeze hampered gas-fired generation and created a power shortage that roiled major markets such as Dallas and Houston. During trading Tuesday, more than 4 million homes and businesses were without power in Texas, the Poweroutage.us data showed.

“Widespread extreme cold and record electricity demand collided with ice and snowstorms” that knocked out power lines and forced generators offline, said Wood Mackenzie analyst Dan Spangler.

While hubs in Texas and neighboring Oklahoma led the charge, prices were up substantially in most regions.

In the Rocky Mountains, Kern River spiked $111.060 to $184.605, while in the Southeast, Florida Gas Zone 3 jumped $17.405 to $23.175 at midday.

Out West, SoCal Border Avg. was up $8.585 to $112.895.

The brutal conditions caused freeze-offs and impaired production throughout much of the nation’s energy sector, adding further upward pressure on prices. West Texas Intermediate crude oil prices topped $60/bbl during trading Tuesday, a 12-month high.

More than 1 million b/d of oil production was offline Tuesday, Weissman noted, and more than 30 natural gas pipelines had declared force majeure. At least 7 Bcf/d of natural gas production had been shut-in due to freeze-offs, he noted.

“LNG exports and industrial demand have also taken major hits,” he said.

In Texas, up to 16,500 MW of load was shed at a time – “the largest deliberate black-out in memory” – and more than 26,000 MW of gas-fired generation was unable to operate early this week, Weissman said.  

“This abysmal performance raises serious questions regarding the reliability of the electricity grid during periods of extreme winter weather, and the ability of regulators and bulk power system operators to properly supervise the operation of the grid,” Weissman said. “A thorough investigation is likely,” potentially leading to major changes in market rules and Federal Energy Regulatory Commission oversight of grid operators.

Despite the challenges imposed by unprecedented demand, the American Gas Association said that 151.7 Bcf of natural gas was delivered in the United States on Sunday – a record — and another 149.8 Bcf was delivered on Monday.

Demand is expected to remain strong throughout the week as “frigid temperatures slowly moderate” beginning Wednesday and continuing over the next few days, NatGasWeather said in a midday note to clients. “The coming six days remain impressively cold with very strong demand.”