Brutal Arctic air has turned parts of the U.S. energy system into a freeze frame, choking off natural gas flows just as heating demand peaks. About 10% of U.S. gas production has been knocked offline by the cold, a disruption that is rippling from wellheads and processing plants to power markets and household bills.
The hit to gas output is arriving alongside steep losses in oil production and widespread power outages, turning a familiar winter hazard into a full‑scale stress test for the country’s energy infrastructure. I see three big questions emerging: how deep the supply damage runs, how long prices stay elevated, and whether the system is any better prepared than it was during past cold‑weather shocks.
The freeze that sidelined 10% of U.S. gas
The headline number comes from Bill Perkins, who as CEO and Head Trader at Skylar Capital Man has a front‑row view of gas flows and price action. Perkins said About 10% of U.S. gas production has effectively been “frozen off,” as wellheads, gathering lines and processing equipment succumb to ice and sub‑zero wind chills. In practical terms, that means a significant slice of daily supply is suddenly unavailable just as furnaces, industrial boilers and gas‑fired power plants are pulling hardest on the system.
The freeze‑offs are not limited to dry gas fields. In key oil basins, Associated wellhead natural gas production has also been curtailed, with estimates that between 0.24 and 0.33 billion cubic feet per day of gas tied to oil output have gone offline. That loss is layered on top of a broader hit to crude production, with U.S. oil producers in regions such as the Permian Basin shedding up to 2 million barrels per day, or roughly 15% of national output, according to reporting from HOUSTON.
Storage cushions, but prices bite
Even with production curtailed, the U.S. entered this cold spell with a sizable buffer in underground storage. The Department of Energy has estimated that inventories stood at 3,065 billion cubic feet on Jan, a level that normally provides a comfortable margin through the heart of winter. I see that cushion as the main reason the current crisis is manifesting more in price spikes and localized outages than in a nationwide shortage.
Prices have still surged. U.S. benchmark natural gas has climbed above 6 dollars per million British thermal units for the first time since 2022, a move fueled by the combination of freeze‑offs, surging heating demand and rising power plant outages as the Arctic blast bears down, according to market data. Earlier in the season, traders were already bracing for volatility as an Extreme Winter Storm, with Severe weather warnings already pushing futures higher.
Texas and the industrial belt under strain
The most dramatic operational impacts are showing up in Texas and the Gulf Coast, where energy and industrial hubs are tightly clustered. A powerful winter storm sweeping across the United States has begun to interrupt operations for major oil, gas and industrial users, according to regional reports. In Pasadena, Texas, Goodyear Bayport (GT) shut down its chemical plant on Saturday ahead of the cold snap, a preemptive move disclosed through a Community Awareness Emergency Response notice that underscores how seriously operators are taking the risk of frozen equipment.
Other facilities have been forced into reactive shutdowns. Exxon Mobil has reported operational impacts at some Texas sites in regulatory filings, while U.S. natural gas output from the state has dropped as wellheads and processing plants succumb to the cold, even as higher demand from heating and power generation could, in theory, offset that effect, according to company disclosures. A separate account of the same deep freeze notes that Goodyear Bayport in Pasadena, Texas, moved early to idle operations on Saturday, highlighting how industrial players are trying to stay ahead of the weather rather than repeat the chaos of past cold snaps, as detailed in local filings.
Oil losses, power outages and Winter Storm Fern
The gas crunch is only one piece of a broader energy shock. As the winter storm swept across producing regions, U.S. oil companies lost up to 2 million barrels per day of crude output, equivalent to as much as 15% of national production, with the Permian Basin singled out as the hardest hit area in KEY TAKEAWAYS. Those same conditions have knocked out power for large swaths of the country, as gas‑fired plants struggle with fuel supply and equipment icing, and as transmission lines and transformers face extreme stress.
Winter Storm Fern has become the public face of this disruption. The system has impacted over 100 m Americans, with more than 1 million people losing power at the peak of the storm before some service was restored. That scale of disruption shows how tightly coupled gas supply, power generation and grid reliability have become. When gas production falters, the effects cascade quickly into electricity markets, industrial output and, ultimately, household resilience.
Market psychology and what comes next
From a trader’s perspective, the current episode is as much about expectations as it is about molecules in the ground. Related market commentary has highlighted how the same deep freeze that froze off About 10% of U.S. gas production also pushed U.S. natgas above 6 dollars, with a Related video of Perkins reinforcing how sensitive prices are to weather‑driven outages. Earlier alerts that an Extreme Winter Storm had already primed the market for a sharp move, so when the physical system faltered, futures reacted instantly.
Perkins himself has doubled down on the warning. In a separate clip, he reiterated that Perkins, About 10% of US gas production has been frozen off by the cold and cautioned that prices could climb further if weather disruptions persist, as captured in a video interview. That same segment notes that it was Posted and Last updated on the same day, underscoring how quickly conditions are evolving and how closely traders are watching each new data point, as reflected in the Posted and Last timestamps.
For now, the system is holding, helped by storage levels and the ability to reroute some flows across the United States. But the combination of frozen wellheads, industrial shutdowns in places like Goodyear Bayport in Pasadena, Texas, and the sheer scale of Winter Storm Fern’s impact on Americans is a reminder that extreme cold remains a structural risk to U.S. energy security. I expect regulators, utilities and producers to spend the rest of this winter dissecting what failed, what held and how to harden the network before the next Arctic blast arrives.
More from Morning Overview