By Bloomberg – Re-Blogged From Newsmax
Natural gas surged to 60 times the going rate as howling blizzard conditions stoked demand for the furnace fuel across the U.S. Northeast.
Spot prices for the fuel used to heat homes and generate power recently 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 U.S. 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. Even if the rally cools later Thursday as the storm lambasting New York and Boston moves off to the north, prices in the region probably will close in the triple digits, the person said.
“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 gas squeeze underscores the 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 the region is the world’s priciest, commanding 14 times more than U.K. futures price and about nine times more than Asian imports of the liquefied version of the fuel.