Lowest NG Prices Since September Despite Freezing Temperatures
Natural gas future prices traded on the NYMEX closed yesterday at $2.814/MMBtu, which is the lowest closing price since September despite the freezing temperatures across the U.S. Storage levels decreased by 173 bcf, 12.18% below market estimates of a 197 bcf extraction. The total 2,197 bcf of natural gas in storage is only 50.2% of its total capacity and 0.6% below last year and 13.0% below the five-year average for this same week. Due to the freezing temperatures the last couple of days, “consumption (in the residential and commercial sectors) increased by 11%, reaching a near-record high of 70.9 bcf/d on Wednesday, January 30, the second highest value ever recorded (the highest was 71.6 bcf/d in January 2014)” (EIA). The prices at New York City’s natural gas trading hub, Transco Zone 6, increased $9.53 from $2.98/MMBtu last Wednesday to $12.51/MMBtu this past Wednesday (EIA).
NYISO Zone J off-peak LMP prices jumped 85% to $97.89/MWh yesterday and on-peak prices increased 39% to $141.13/MWh. The prior seven-day average ATC electricity prices in Zone J were $44.43/MWh. PJM Western Hub’s ATC price doubled to $87.6/MWh and ISO- NE Mass- Boston Hub ATC prices increased about 10% to $87.54/MWh. The NOAA stated that the life-threatening temperatures in the central and eastern states the last couple of days will exit the Northeast Friday, 2/1/19. Temperatures are expected to increase for February, which could push electricity prices back down.
Natural gas pricing plays a key role in electricity power pricing due to the increasing reliance on natural