The price of natural gas delivered to New York City and the mid-Atlantic states has soared to record highs this week, according to an article posted on NASDAQ.com.
A snowstorm accompanied by freezing temperatures raised concerns among traders that natural gas supplies would drop again, as they did earlier this month, according to the article.
Natural gas for delivery Wednesday soared to $135 per million British thermal units at Transco Zone 6, a pipeline delivery point in New Jersey where New York City gas prices are set. Prices on the same pipeline for delivery from the Virginia/Maryland border to Linden, N.J., rose even higher, climbing to a record $140/mmBtu, the article states.
Those spot prices are about 30 times higher than the nationwide price of natural gas on the New York Mercantile Exchange. The NYMEX price for February delivery was $4.431 per million British thermal units on Tuesday, the article reported.
“The surge in prices for the second time this month underscores concerns about the infrastructure needed to transport natural gas from booming shale fields to densely populated areas when the heating fuel is needed,” the article states.
Natural gas prices typically spike to between $40/mmBtu and $50/mmBtu in periods of cold weather, but Tuesday's sharp climb beat a previous record of $90/mmBtu for the New York hub set on Jan. 6, according to the NASDAQ article.
"While supply is greatly increased because we have plenty of natural-gas production, right now we have a transportation and storage issue," said Dennis Weinmann, a principal at Coquest Inc.
The amount of natural gas in storage is now 2.53 trillion cubic feet, down 15% from the five-year average for this time of year, according to the article.
To read the NASDAQ article, click here.