Record-Setting Cold Roils Markets From Heating Fuel to Wheat
This is how cold weather led to more demand for natural gas.
(Bloomberg) -- A record-breaking cold that’s threatening to spur heating-fuel shortages from the East Coast to Texas has driven up natural gas demand to unprecedented levels and put crops across the U.S. wheat belt at risk.
Wind chill advisories and freeze warnings blanket the central U.S., while winter storm watches are in place from Massachusetts to Florida. Ice has slowed fuel deliveries from New York harbor, the gasoline and diesel hub for the region, while power prices are trading near multi-year highs.
“It is very cold and in a lot of places it is record cold,” said Bob Oravec, a senior branch forecaster at the Weather Prediction Center in College Park, Maryland.
A winter storm that’s set to race up the East Coast on Wednesday offers to provide some respite from the bone-rattling cold. But any relief will only be temporary as the Arctic chill is set to make a comeback by the end of the week.
“This is only the appetizer -- the main meal comes over the weekend,” said Judah Cohen, director of seasonal forecasting for Atmospheric and Environmental Research, a Verisk Analytics Inc. business in Lexington, Massachusetts. “This is about as intense a cold as I can remember.”
Boston hasn’t reached 32 degrees Fahrenheit (0 Celsius) -- the freezing mark -- since Christmas, according to the National Weather Service. New York’s LaGuardia and John F. Kennedy airports have set new records while Chicago had its coldest New Year’s Day ever.
Boston’s set to tie a 100-year-old record with seven days of high temperatures below 20 degrees, said Bill Simpson, a weather service meteorologist in Taunton, Massachusetts.
Two Years
The U.S. consumed 143 billion cubic feet of gas on New Year’s Day, data from PointLogic Energy show. Prices for the heating fuel rose to a one-month high of $3.097 per million British thermal units on the New York Mercantile Exchange.
Plunging temperatures across the wheat belt on Monday damaged crops that didn’t have a protective layer of snow, according to World Weather Inc., sending futures contracts higher. Since the cold snap arrived, New York City has seen some of the highest electricity prices in two years.
The Federal Motor Carrier Safety Administration declared a state of emergency and issued fuel-delivery waivers effective through Jan. 14 in anticipation of home-heating fuel shortages in some regions.
Expected Snowfall
New York City could get 2 to 3 inches (5 to 8 centimeters) of snow from Wednesday to Thursday, while Boston could get around 6 inches, the National Weather Service said. Temperatures will rise out of the teens and single digits from Philadelphia to Boston before slipping back again by Friday and Saturday.
While the cold on the East Coast could moderate with the snow, temperatures could approach the freezing mark in Boston, said Paul Walker, a meteorologist with AccuWeather Inc. in State College, Pennsylvania. The storm will likely cause blizzard conditions in New England and eastern Long Island as high winds accompany the snow.
Another blast of bitterly cold air will sweep across the U.S. by the middle of next week, Oravec said. The chill could linger through Jan. 16, but perhaps with not quite the intensity of the recent spell, said Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland.
--With assistance from Laura Blewitt Tim Loh and Megan Durisin
To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net.
To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Stephen Cunningham, Will Wade
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