- Heating fuel prices barely budged on outlook for storm
- East Coast snowfall may reach `historic' proportions
When it comes to energy markets, Mother Nature couldn’t have chosen a better time for a blizzard.
The glut of natural gas flowing out of U.S. shale formations has kept the storm’s impact on prices muted. Gas futures gained less than four pennies per million British thermal units this week, even as meteorologists described the winter storm as potentially historic and “paralyzing.” Power grid and markets operator PJM Interconnection LLC said it had “no major concerns” because the storm’s hitting over a weekend, when electricity demand is naturally lighter.
Demand from the storm will do little to chip away at a surplus in U.S. gas supplies that has swelled to the biggest since 2013 compared with the five-year average. Distillate fuel oil stockpiles in the U.S. East are at the highest level since December 2010 with the nation’s refiners running at more than 90 percent of capacity and following what has, for the most part, been a mild winter.
The same blizzard may have wreaked havoc on energy markets a decade ago. But “very high inventories and production are going to insulate the market from these cold snaps,” going forward, Kent Bayazitoglu, an analyst at Gelber & Associates in Houston, said by phone Friday. “As far as the Northeast is concerned, it’s only a little bit colder than normal.”
Gas futures climbed 0.1 cent on the New York Mercantile Exchange to close at $2.139 per million British thermal units on Friday. Prices are down 8.5 percent this year as shale-gas supplies fill storage caverns across the country. Diesel contractshave fallen almost 10 percent over the same period.