Natural gas prices spiked to an all-time high heading into the weekend, with regional prices in the Northeast rising on electrical outages and refinery disruption. Snowfall late last week led to 235,000 power outages, with a majority of outages reaching into Canada.
Nova Scotia had 85,100 outages at one point.
Philadelphia’s refineries suffered from severe cold that caused the U.S. Coast’s largest plant to drastically cut production levels. Heating demands over the weekend soared as cold temperatures spread from Maine down through Florida. Areas of Texas have also dipped below the freezing mark since the start of the New Year.
CNN reports that 90% of the country was below 32 degrees on New Years’ day.
Temperatures in Massachusetts dipped to the near-freezing mark, causing the state’s only nuclear plant to have to shut down operations temporarily. The plant suffered from a line failure that connects the reactor to the power grid.
Reports from Josco Energy’s blog show service has been restored to much of the Northeast.
Natural gas spot prices rose as energy demands increased heading into the weekend, sending prices up to $175/MMBtu in New York City.
Reports from the Gas Exporting Countries Forum less than a month ago indicate expectations that natural gas prices will lower over the next two decades as unconventional sources of energy increase. The “bomb cyclone” of last week caused natural gas prices to rise 1.52% in the last month. Natural gas prices are up 0.68% on Monday.
Heating oil prices remain timid on Monday, down 0.61% on the day and up 6.08% in the trailing 30-day period.
The U.S. Energy Information Administration states that temperatures on Monday were 8 – 12 degrees cooler than average in the Northeast. Natural gas demand is projected to drop this week as temperatures warm. Demand is estimated to fall from 9.4 billion cubic feet (Bcf) on Saturday to 8.3 Bcf on Monday in New York City.
Average utilization is above 95% for major natural gas pipelines delivering into New England on Monday. Transco remains constrained despite falling demand in New York City. LNG Facilities reports demand falling from 2.0 Bcf on Saturday to 1.3 Bcf on Monday. LNG has averaged 1.6 Bcf daily to start the year, up from 0.7 Bcf during the same period in 2017.
On-peak prices for gas are down 50% since January 5. SNL’s prices for on-peak hours on Monday are $151/MWh in New England and $121/MWh in New York City.
The surge in demand last week has led to many pipeline notices being posted. Gas pipelines have posted critical notices advising consumers to lower their capacity to what’s in their contractual rights. Failure to lower transportation capacity of natural gas may result in interruptible service in the region.
Temperatures in New York City are expected to rise to 32F, up from 10F on Saturday. Temperatures in Boston are expected to rise from 9F on Saturday to 26F on Monday.
Heating oil demand is also on the rise, with 21% of households in the Northeast relying on heating oil for space heaters.