Extreme cold expected to linger for several more days
Extreme cold weather in the U.S. Northeast pushed regional New York natural gas prices to their highest level in nine years intraday on Thursday, but prices ended the day at their loftiest mark in five years, Reuters data showed.
Early in the day, gas for Friday delivery on the Transco pipeline at the New York City gate jumped more than $3 to an average of $39 per million British thermal units, the highest average price for New York gas since peaking at $47 in 2004.
But despite trades as high as $44, the final average price on Transcontinental Gas Pipeline system (Transco) was $38, just under the 2008 winter peak of $38.35.
Other New York prices traded in the $12.50-to-$32.50 area, with other Northeast prices in the $31-to-$34 area, according to ICE.
The William Companies Inc.-owned Transco is a major provider of natural gas to the U.S. Northeast and Southeast.
The company on Wednesday issued a systemwide operational flow order to its shippers effective Thursday as the cold led to significant demand.
Operational flow orders, or OFOs, protect the integrity of a pipeline by requiring shippers to balance their daily supply with customers’ usage, typically within a specified tolerance band.
Transco said it would notify all shippers as soon as operations on its system allow the termination of the OFO.
The 10,000-mile (16,100-km) Transco natural gas pipeline system has the capacity to carry 9.6 billion cubic feet of supply per day from south Texas to New York City.
Temperatures in New York reached a high of only 24 degrees Fahrenheit (-4 degrees Celsius) on Thursday, with lows dipping into the low teens, and highs on Friday also topping out under 30 degrees F.