(Bloomberg) – The arctic freeze in the central US will intensify, putting further pressure on energy prices already trading at unprecedented levels over the long holiday weekend.
Natural gas hit a record $ 600 per million British thermal units in Oklahoma. Temperatures fell so far below forecasts in parts of the central and western US that physical gas prices from California soared to the Rockies, with one hub in Cheyenne, Wyoming, reaching as high as $ 350 per mmBtu, according to traders asking not to be identified. because the information is not public.
Heating and power plant fuel traded in Southern California for a whopping $ 195 per mmBtu. If the day-ahead electricity prices are an indication and the weather forecasts are even partially correct, the run-up in energy prices is not over yet.
“It’s a pretty brutal mass of air,” said Bob Oravec, senior industry forecaster at the US Weather Prediction Center. “The cold air is deeply rooted in the center of the country. High temperatures are astonishingly cold, about 50 degrees below average. “
In the US, 797 daily cold temperature records have been set, according to the National Centers for Environmental Information. Early on Sunday, the coldest spot in the US was 25 miles east of Ely, Minnesota, where readings dropped to -50 degrees Fahrenheit (-46 degrees Celsius). As of 7 a.m. in New York, 2,653 flights around the US had been canceled through Monday, the majority in Dallas and Houston, according to FlightAware, an airline tracking service.
Huge increase
The wholesale power for Sunday delivery traded anywhere from $ 3,000 to $ 7,000 per megawatt hour in some places, tripling records set in some places on Saturday and a whopping 2,672% increase from Friday at Texas’s Western hub.
Traders said Saturday that never so long ago have they seen electricity trading on the Texas power grid for thousands of dollars. They compared this week’s price increases with records set on the Midwestern grid in 1998, and with the California energy crisis that skyrocketed power prices and darkened hundreds of thousands of homes and businesses two decades ago.
Temperatures so low and heat demand so high could test Texas electricity price caps on Sunday.
Among the other markets that are cold:
Chicago gas hit $ 220 per mmBtu, traders said Physical gas was going for a whopping $ 300 per mmBtu at a Texas hub. somewhere between $ 4 and $ 12 per mmBtu on Friday, price data collected by Bloomberg show.
Gas processing plants all over Texas are closing as liquids freeze in pipes, disrupting output, as does demand. And oil production in the Permian basin, the largest shale game in the US, is declining, while wells slow down or come to a complete standstill.
Texas’ chief energy regulator took emergency measures to ensure that households, hospitals, utilities, and other “customers with human needs” are prioritized in accessing gas for furnaces. Texas Railroad Commission staff warned that there will be “serious implications for the supply of energy resources in the coming days.”
According to PowerOutage.us, 668,261 customers in six states had lost power on Saturday due to the rough weather. Oregon and Virginia were hardest hit with over 200,000 customers after dark.
Mexico to Canada
As much as 4 inches (10 centimeters) of snow can fall on weekends in Fort Worth, Texas, with temperatures potentially dropping into the single digits of Fahrenheit on Sundays and Mondays. Houston is likely to get a layer of ice and less than an inch of rain.
Freezing rain has already created treacherous driving conditions there, with 130 vehicles stacking up in Forth Worth on Thursday killing six and injuring dozens. Winter storm warnings, watches, and advisories stretch from Brownsville, Texas, on the border with Mexico to the border with Maine. with Canada. Mexico has snow warnings for northeastern parts of the country, and Canada has similar warnings for its maritime provinces. The worst winter fury will miss the major cities along the east coast because the storm’s trajectory will be too far west, Oravec at the Weather Forecast Center said. There may be some snow and ice in New York and Boston, but most of the accumulation will take place Monday through Tuesday in upstate New York and inland New England. “The east coast’s major urban areas are missing the worst aspects of this winter weather,” said Oravec.
(Adds weather commentary from the fourth paragraph)
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