Spot prices for natural gas in New England from Jan.1 to mid-February averaged a record $22.53 per million British thermal units (MMBtu), or 50 percent above the price from a year ago, the US Energy Information Administration reports.
The day-ahead wholesale (spot) natural gas price at the Algonquin Citygate hub serving Boston, according to data from Intercontinental Exchange (ICE), is a record high for these dates since the ICE data series began in 2001. Last year’s highs were set when cold weather drove New England prices to their highest level since 2004.
The average bidweek (the last three trading days of the month for the prompt month contract) price for natural gas delivered at Algonquin in February 2014 also reached a record high of $33.79/MMBtu. These high winter prices in New England resulted from a combination of increased weather-driven demand for natural gas and constraints on the supply of gas to consumers there. Increased power demand and greater reliance on natural gas as a generation fuel all contributed to the spike. Prices had eased somewhat in mid-January, but that relief was short-lived.
Average 2014 daily consumption of natural gas in New England through February 18 has risen by 4.7 percent over the same period in 2013, from 4.4 billion cubic feet per day (Bcf/d) to 4.6 Bcf/d. Higher demand has pushed up prices in both the spot and futures markets.
Supply constraints have occurred as deliveries of regassified liquefied natural gas (LNG) from Northeast terminals are down more than 30 percent so far in 2014 compared to 2013. Also, major pipelines transporting natural gas into New England have been congested.
Photo: John S. Quarterman’s Flickr photostream
