As snow settles across New England and regional natural gas prices retreat, the lingering impact of this winter's biggest storm yet is likely to extend beyond the frigid temperatures forecast for this weekend.
On Friday morning, cash prices for this weekend's flow dates were down sharply at hubs along the Northeastern Atlantic Seaboard, tumbling $75/MMBtu or more.
During the late-morning session, Boston-area hub, Algonquin city-gates, was talked at either side of $25/MMBtu. At the Upstate New York Iroquois Zone 2 hub, prices had retreated to the mid-$33s/MMBtu. Metro New York-area prices remained elevated around $65/MMBtu, but were down about 50% from Thursday's settlement price.
Further west, prices at Chicago city-gates were trading in the upper $3s/MMBtu, while cash prices at the benchmark Henry Hub had normalized to around $2.90/MMBtu.
While the headline-grabbing snow event has now passed, much of the coastal Northeast is forecast to see temperatures plunge into the single-digits by Saturday, making for some of the coldest weather in three years.
On Saturday, Platts Analytics sees a population-weighted Northeast temperature of just 8 degrees Fahrenheit lifting total regional gas demand to 40.3 Bcf/d, just shy of record levels seen in February 2015.
But with additional production freeze-offs likely in the Northeast and the Midcontinent over the coming days, the supply-side impact of recent cold snap looks likely to linger.
Perhaps more importantly though, the cumulative impact of weather-driven shocks to supply and demand is now forecast to dramatically cut US storage inventories -- a factor that could lift prices later this season or potentially entering the summer months.
Over the next three weeks, Platts Analytics is forecasting consecutive storage withdrawals of 335 Bcf, 227 Bcf and 141 Bcf. Assuming five-year average pull through the first week of April, the season-ending US inventory level would decline to 1.391 Tcf -- potentially the lowest in four years.
In the three largest coal consuming regions in the US through January 4, coal burn in MISO is up 19% on a year-to-date basis compared with 2017, up 28% in the Southeast and up 22% in PJM, according to S&P Global Platts Analytics.
US coal prices have remained steady, largely due to relatively high stockpiles on a days-of-burn basis. The spot price for Powder River Basin 8,800 Btu/lb coal in the over-the-counter market ended the week at $12.40/st, unchanged from the start of the week, while spot Central Appalachia rail (CSX) coal (12,500 Btu/lb) ended the week at $64.75/st, down 0.46%. Prices for both coal products are relatively elevated, however; PRB 8,800 coal averaged $11.71/st in 2017 while CSX coal averaged $56.99/st.