Gas at one U.S. hub is trading at $999. Last week it was at $4

Supply for next-day delivery at the Oneok Gas Transportation hub in Oklahoma traded at $999 per million British thermal units for two contracts on Tuesday, according to David Hoy, a trader at Dynasty Power in Calgary. That compares with $4.19 a week earlier.

Gas at the Henry Hub in Louisiana, the benchmark for futures in New York, traded at $19 at about 11:45 a.m. in New York after earlier soaring to $30, Hoy said. Supply at the hub traded at $3.24 a week ago.

Production of gas in the Lower 48 states has plummeted to a three-year low as frigid weather triggers blackouts and causes liquids to freeze inside pipes, forcing wells and processing plants to shut. Underpinning the rally is the prospect of tighter inventories by the end of the winter as heating demand soars. Liquefied natural gas export terminals shut or curtailed operations amid a disaster declaration in Texas.

“It’s a shocking situation,” said Cody Moore, head of gas and power trading at Mercuria Energy America LLC. “It’s chaos. It’s crazy with the prices.”

Gas futures also rose, though they didn’t fully reflect the turmoil in the day-ahead market. Contracts for March delivery rose 10% to a three-month high before settling up 7.5% at $3.129.

The spread between March and April futures — essentially a bet on how well supplied the market will be at the end of winter — rose to the highest since November.

The cold ravaging the central U.S. should persist for days to come, with temperatures from South Dakota to Texas remaining well below average at least through Saturday, according to private forecaster Commodity Weather Group.

“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,” Andy Weissman, chief executive officer of EBW AnalyticsGroup, said in a note to clients. “Massive amounts of production are offline, but so is a huge number of gas-fired power plants.”