EIA: temperature has strong effect on northeast spot gas prices

Temperature has strong effect on northeast natural gas spot prices

Natural gas spot prices fluctuate throughout the year in response to several factors, including weather, production levels, supply interruptions, pipeline constraints, inventory levels, and the availability of other energy sources, the U.S. Energy Information Administration (EIA) said in a report.

Temperature changes, more than any other factor, most frequently correlate with natural gas spot price movements. Natural gas demand and, in turn, natural gas prices in the spot market, will generally rise as temperatures move further away from 60 degrees Fahrenheit, as more natural gas is needed for space heating as temperatures cool and for power generation as temperatures warm.

Winter daily natural gas spot prices vs. temperatures

However, this relationship takes different forms at various locations throughout the United States. The impact of extreme cold is particularly large, reflecting high usage for heating combined with infrastructure constraints in some markets. In the Northeast, prices are particularly sensitive to temperature variations, rising by more than other regions as temperatures cool and high demand exacerbates pipeline constraints, as well as when temperatures warm and rising natural gas demand from electric generators can strain pipelines.

Summer daily natural gas spot prices vs. temperatures

Conversely, during more temperate days in the spring and fall, when pipeline capacity is generally sufficient to meet lower demand, the proximity of northeastern hubs to increasing Marcellus Region production results in prices that are lower than those in other parts of the United States.

Spring daily natural gas spot prices vs. temperatures

 

Source: EIA, August 11, 2014

 

Share this article

Follow LNG World News

2 thoughts on “EIA: temperature has strong effect on northeast spot gas prices”

  1. Pingback: otis
  2. Pingback: jay

Comments are closed.

Events>

<< Apr 2020 >>
MTWTFSS
30 31 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 1 2 3

Flame 2020

Flame is Europe’s largest and most influential meeting place for the global gas industry.

read more >

4th PNG Petroleum & Energy Summit

The CWC Group, in partnership with Kumul Petroleum Holdings Ltd.

read more >

FSRU World Congress 2020

FSRU World Congress 2020 will therefore focus on further Commercialising FSRUs through LNG-to-Power…

read more >

CWC World LNG & Gas Series: 12th Asia Pacific Summit

The 2020 Summit will offer an unrivaled programme covering relevant and significant discussion topics…

read more >