Cold’s grip lifts natural gas prices
Weather boosts heating fuel demand, puts wheat at risk
A record-breaking cold that’s threatening to spur heating-fuel shortages from the East Coast to Texas has driven up natural gas demand to unprecedented levels and put crops across the U.S. wheat belt at risk.
Wind chill advisories and freeze warnings blanket the central U.S., while winter storm watches are in place from Massachusetts to Florida. Ice has slowed fuel deliveries from New York harbor, the gasoline and diesel hub for the region, while power prices are trading near multiyear highs.
“It is very cold, and in a lot of places it is record cold,” said Bob Oravec, a senior branch forecaster at the Weather Prediction Center in College Park, Md.
A winter storm that’s set to race up the East Coast today offers to provide some respite from the bone-rattling cold. But any relief will only be temporary as the arctic chill is set to make a comeback by the end of the week.
“This is only the appetizer — the main meal comes over the weekend,” said Judah Cohen, director of seasonal forecasting for Atmospheric and Environmental Research, a Verisk Analytics Inc. business in Lexington, Mass. “This is about as intense a cold as I can remember.”
Boston has been below the freezing mark since Christmas, according to the National Weather Service. New York’s LaGuardia and John F. Kennedy airports have set new records while Chicago had its coldest New Year’s Day ever.
Boston’s set to tie a 100-year-old record with seven days of high temperatures below 20 degrees, said Bill Simpson, a weather service meteorologist in Taunton, Mass.
The U.S. consumed 143 billion cubic feet of gas on New Year’s Day, data from Point-Logic Energy show. Prices for the heating fuel rose to a one-month high of $3.097 per million British thermal units on the New York Mercantile Exchange.
Bitterly cold weather is threatening wheat plants as cattle battle to stay warm.
A wide swath of the U.S. wheat belt faced readings below zero on Monday, damaging crops that didn’t have a protective layer of snow, according to World Weather Inc.
March futures tracking both hard red winter and soft red winter wheat climbed to the highest since early December in Chicago, while the February cattle contract reached a one-month high.
The cold weather means it takes longer for cattle to add pounds, though the impact isn’t expected to last long, said Dennis Smith, a senior account executive at Archer Financial Services in Chicago. While hogs and poultry are primarily raised indoors, cattle graze on pastureland and bulk up in outdoor feedlots throughout the year.
“When it’s so cold, they have to consume so much energy just to stay warm that the weight gain is going to be minimal,” Smith said. Once the freeze ends, “they also will probably recover fairly quickly because it’s not going to be a huge muddy mess,” thanks to recent dry weather, he said.