"Use of fuel oil by generators in New England kept gas prices considerably lower than other parts of the Northeast during several cold weather events. For example, on January 22, natural gas prices reached $73/MMBtu at Algonquin Citygates in Boston. By contrast, spot natural gas prices at Transco Z6 Non-NY, prices spiked to $123/MMBtu, breaking all previous records."
Spot prices topped $60/MMBtu in California during the first quarter. They may top $100 this summer.
"All five natural gas pipelines that serve New England operated at or near full capacity. Needless to say, the natural gas pipeline system serving New England is far more constrained than anyone had previously appreciated."
Full article: http://www.forbes.com/sites/williampent ... w-england/
Very little gas is sold at spot prices by the E&P companies. They sell under long-term contracts tied to indexes. Spot prices spike when utilities have to get industrial users to sell them their supply to meet system demand. The utilities will pay whatever it takes to maintain the pressure in their residential systems.
Natural Gas Spot Prices
Natural Gas Spot Prices
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Spot Prices
today is proof the natty mkt is extremely nearsighted.