A winter storm named Fern is expected to significantly affect energy and power production across the United States. Natural gas prices have surged dramatically, rising 70% in less than two weeks. Excelerate Energy (EE), a natural gas importer, has experienced a notable increase of 28% this month, while Exxon Mobil (XOM) continues to perform well within its extensive natural gas operations, rising 12% in January. The anticipated loss of natural gas supply due to the storm ranges between 10 billion to 80 billion cubic feet, although experts do not predict an extraordinary spike in gas prices similar to previous storms like winter storm Uri in 2021, which resulted in a loss of 30 billion cubic feet of daily production without a significant price increase.
Pipelines could also face disruptions, as natural gas is composed of water that can freeze, affecting production equipment. Energy Transfer (ET), OneOK (OKE), Kinder Morgan (KMI), and other companies are closely watched by analysts for their potential upside.
Utilities are preparing for possible power outages caused by heavy snowfall and ice, with Exelon (EXC) and NRG Energy (NRG) highlighted for their significant customer bases in expected storm-hit regions. The utility sector is currently engaged in a public relations effort to address electricity costs as they anticipate heightened scrutiny from customers.
Repair and infrastructure services will be critical following the storm. Companies like Quanta Power Services (PWR) and MasTech (MTZ) are positioned to benefit from post-storm repairs and infrastructure investments.
As energy needs remain high both domestically and internationally due to cold temperatures, U.S. LNG exporters like Cheniere (LNG) will continue to be vital players in meeting demand.
Why this story matters
- The storm’s impact could reshape energy supply chains and pricing across the U.S.
Key takeaway
- Natural gas prices are experiencing volatility, with significant implications for various energy sectors amidst winter storm Fern.
Opposing viewpoint
- Concerns regarding potential power outages and infrastructure failures could lead to public backlash against utility companies, despite their efforts to ensure reliability.
