Natural gas in US soars 60-fold amid icy squeeze in Northeast

Bloomberg

Natural gas surged to 60 times the going rate as howling blizzard conditions stoked demand for the furnace fuel across the US Northeast.
Spot prices for the fuel used to heat homes and generate power reached a record $175 per million British thermal units in New York, according to Consolidated Edison Inc. That’s a far cry from the $2.93 that US gas futures have been averaging on the New York Mercantile Exchange this winter.
Other major trading hubs in New York and New England saw prices exceed $100, according to a person familiar with those markets. “This string of cold has stressed the market just as much as the polar vortex” of 2014, said John Borruso, director of natural gas trading at ConEdison in Valhalla, New York. “You are seeing pipeline restrictions and flow restrictions pop up.”
The cold-weather cyclone swirling off Nantucket island grounded thousands of flights, disrupted rail service, shut schools and prompted emergency declarations up and down the Eastern Seaboard. Even as slashing winds cut off power to more than 70,000 homes and businesses, electricity prices climbed 126 percent to $273.23 a megawatt-hour morning, the highest for that time of day in almost four years.
The gas squeeze underscores lack of adequate pipeline capacity to haul enough gas from Appalachia and points farther afield to Northeast metropolises where households have been scrapping heating-oil tanks for gas-fired furnaces. As a result, gas in region is world’s priciest, commanding 14 times more than UK futures pr-ice and about 9 times more than Asian imports of liquefied version of the fuel.
The market mayhem in and around New York is having a knock-on effect even in regions far away from stormy weather. At an Appalachian pipeline hub known as Dominion South that is typically home to the cheapest American gas, the price jumped to $4.15, almost twice the 12-month average and a huge premium to late October, when it fetched just 29 cents, according to Borruso and
Intercontinental Exchange data.