As cold — albeit waning — continued to grip much of the United States Tuesday, power plants in PJM Interconnection and ISO New England wereimpacted by natural gas delivery issues and/or high prices for the fuel. The Energy Information Administration (EIA) said pipelines into New England were constrained by the Polar Vortex. Meanwhile, throughput at a central Alabama gas utility was running at 10-year record levels.
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Natural Gas Price Forecasts Revised Higher
The below-normal temperatures and deep freeze across the country led two analysts on Monday to revise upward their forecasts for U.S. natural gas prices in the first quarter.
Polar Vortex Sends Northeast Next-Day Gas Prices $40-$60 Higher
Arctic temperatures sweeping much of the country in a Polar Vortex strained pipeline throughputs and pushed natural gas spot prices to record highs in the Northeast. Transco Zone 6 non-NY next-day prices shot higher by $59.76 to average $70.66/MMBtu, while Transco Zone 5 increased by $61.27 to average $72.43/MMBtu, according to NGI’s Daily Gas Price Index.
Record Cold Equals Record Prices: Near $100 Gas Traded On Transco
Prices for physical natural gas traded Monday for Tuesday delivery spiked in response to a Polar Vortex and record cold temperatures sweeping across the country. The day recorded the three highest prices ever published in NGI’s Daily Gas Price Index (see chart). Biggest gainers on the day proved to be points in and around New York City.
Arctic Chill has Buyers Hoping Monday Gas Shows Up
Physical natural gas trading for weekend and Monday delivery seemed to resemble two Sumo wrestlers vying for supremacy with clashing weather-driven market forces from the Midwest grappling with offsetting market factors in the East.
New England Locations Over $30 As Nearly All Points Gain; Futures Rise
Spot natural gas prices for delivery Friday soared in Thursday’s trading as cold and in some cases blizzard conditions were forecast for major energy markets in New England and along the East Coast as winter storm Hercules moved in.
Forecast of Cold, Snow Ring in the New Year with Higher Cash Prices; Futures In A Tailspin
Northeastern physical gas values for Wednesday and Thursday delivery mostly ticked higher in Tuesday’s trading as traders had to lock up volumes ahead of mind-numbing cold and snow expected to pound eastern energy markets. Mid-Atlantic points posted stout gains, but pipes serving the Boston area suffered declines. Futures traders took a big hit with February dropping 19.7 cents to $4.230 and March falling 18.9 cents to $4.193. February crude oil shed 87 cents to $98.42/bbl.
Super-Sized New England Gains Fuel Advance; Futures Add 6 Cents
Physical natural gas for delivery Tuesday vaulted higher Monday, fueled in large part by a number of capacity constrained points in New England. At the close of futures trading February had advanced 5.9 cents to $4.427 and March was higher by 4.6 cents to $4.382. February crude oil fell $1.03 to $99.29/bbl.
Cash Holds, But Futures Traders See $4.60 Gas
Deliveries of weekend and Monday gas were unchanged on average in Friday’s trading, with eastern and Northeast weakness for the most part offset by gains in the Midwest. At the close, January had fallen 2.6 cents to $4.407 and February was down 10.8 cents tgo $4.368. February crude oil added 77 cents, to $100.32/bbl, the first time oil has traded above $100 in two months.
Broad Weakness Outdoes New England Strength; Futures Ease Higher
Physical gas for Friday delivery slipped a few cents Thursday as outsized gains at New England points could not offset broader losses in the Midwest, Gulf Coast and California.