Next-day power prices in New England and PJM, which covers much of the US Mid Atlantic and Midwest region, jumped to their highest since January 2014 due to a spike in local natural gas prices. Next-day natural gas prices in New York, the Mid Atlantic, the Gulf Coast and New England soared to their highest since 2014 during the extended cold snap.
Those highs occurred as demand for gas for heating in the lower 48 US states hit an all-time high of 142.2 billion cubic feet per day on January 1, according to Reuters data. Total consumption, which includes rising exports via pipeline and liquefied natural gas, was expected to near the record high again on Friday as the cold weather maintains its grip on much of the country, the data showed. One bcfd is enough natural gas to fuel about five million US homes.
At the same time demand jumped to new highs, the cold weather cut gas production by as much as 8 percent this week by freezing wells in shale basins across the country. Production fell to around 71.1 bcfd on January 1 from a record high of 77.5 bcfd on December 26, Reuters data showed. Output has since recovered a bit to a projected 71.9 bcfd on Thursday.
Next-day gas prices in New York City jumped to $51.42 per million British thermal units (mmBtu) for Thursday, their highest since January 2014. The average price for gas in New York in 2017 was $3.08/mmBtu. Next-day gas prices for Thursday at the Henry Hub benchmark in Louisiana and Dominion South in southwest Pennsylvania both rose to their highest since March 2014.
Spot gas in New England soared to $53.50/mmBtu last week, its highest since January 2014. New England prices, which averaged $3.80/mmBtu in 2017, have mostly remained over $20/mmBtu over the past week.