Natural gas spot prices in the Western U.S. rocketed to new highs over the holiday weekend as frigid temperatures froze pipelines, wind turbines stopped, and more than 4 million Texans endured power outages.

While cash prices at the benchmark Henry Hub nearly doubled to $6.118/MMBtu for Feb. 16 flows, prices at the Waha Hub in the Texas Permian Basin climbed nearly 50 times higher for gas flows on that date, according to S&P Global Market Intelligence.

Gas-fired power plants in Texas began shutting down for lack of the fuel on Feb. 15, according to Electric Reliability Council Of Texas Inc. officials. Wind turbines, a leading supply of Texas power, began icing up and going offline Feb. 15, but most of the 15 plant outages reported by ERCOT were thermal generators.

"The physical market, where schedulers at utilities and end-use facilities are responsible for ensuring there will be enough gas to meet demand day-to-day, was clearly sending catastrophic signals — a complete meltdown," RBN Energy analyst Sheetal Nasta said in a Feb. 15 note.

"The average for Midcontinent hubs was nearly $240/MMBtu — as well as many Western hubs, where even the lowest trades of the day were in the triple digits," Nasta said. "The national average price for all traded hubs on Friday [Feb. 12] was about $62/MMBtu, again, well above anything the market has ever seen."

Nasta said the cause of the price spike is twofold: The deep freeze was historic, and most pure-play gas production has migrated away from Texas and the Mid-Continent to the Appalachian shales, leaving only gas production associated with oil wells, which are more prone to freezing off.

Cash prices at the Leidy, Pa., hub in northeast Pennsylvania's Marcellus Shale dropped 16% to $3.75/MMBtu on Feb. 16 before a mass of frigid air known as a "cold dome" covered half the country, according to S&P Global Market Intelligence data.

Analysts at energy investment bank Tudor Pickering Holt & Co. said the long-term impact of the cold snap will push 2021 average prices through the $3/MMBtu mark, closing around $4/MMBtu by winter 2022. "For our gas producers under coverage [in Appalachia], near-term cash flow impacts are likely to be fairly minimal as prices at most Northeast hubs remain in single digits," Tudor Pickering Holt said Feb. 16. "However, over the longer term, the rising tide is set to lift all boats. We're expecting the current week (next week's report) to deliver just the second 300+ [Bcf] draw in history, and there's talk of another potential cold snap in March."

"If our supply assumptions prove correct and balance needs to be restored on the demand side, we see prices needing to rise to $3.50 this summer and, if producer discipline holds, a return to $4 next winter appears inevitable," the investment bank said.

"The situation is far from over, with the coldest weather still to hit parts of the country, including the Northeast," RBN Energy said. "From the looks of trading activity on the Intercontinental Exchange for 'same-day' gas flows — the screen was lit up with $100-$400/MMBtu trades — volumes are still hard to come by and the market is still in panic-buying mode."