Gas price hits $4.49/mmBtu as November cold blast continues

The weather outside is frightful, especially for November, in many parts of the country and that’s probably one reason that the futures price for natural gas is higher than it’s been in a long while.

Figures posted Nov. 21 by the Energy Information Administration (EIA) listed a price of $4.49/mmBtu for December delivery of Nymex market natural gas.

That’s roughly 51 cents higher than a week earlier and almost 82 cents more than it was a year ago, according to EIA data.

The agency’s figures show that natural gas inventories are beginning to fall after a heavy summer of natural gas production and storage. EIA placed natural gas inventories on Nov. 14 at 3,594 Bcf. That’s down 17 Bcf from one week earlier and 201 Bcf from year earlier.

As of early Nov. 21 the heavy lake effect snow had still not abated around the Great Lakes, resulting in “very difficult or nearly impossible” travel conditions in the heaviest part of the bands.

Non-gas retirements could make things worse in New England

In a Nov. 18 posting on the Genscape web site, the director of that firm’s New England/New York desk, Natalia Mestvirishvili, predicted another winter of power market volatility in New England.

“The mismatch in supply and demand for gas is expected to continue this winter, exacerbated even further by the retirement of non-gas-fired generators,” Mestvirishvili said.

“Salem Harbor, a 749 MW coal and oil unit, retired in June, while the Vermont Yankee 670 MW nuclear unit is scheduled to retire in December, putting more pressure on gas fired generators to meet the demand for electricity,”

To address the issue, the New England ISO has been implementing a winter reliability program to incentivize generators to procure oil and liquefied natural gas (LNG) entities to better prepare to meet the demand for the coming winter. With this incentive, Everett terminal, an LNG importing point in New England, is in a good position to procure gas for the winter, Mestvirishvili said.

Meanwhile, Nov. 21 figures from the Nuclear Regulatory Commission (NRC) indicate that only seven of the nation’s 100 nuclear reactor units are not currently generating power. Only two of those offline are located in the Northeast.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.