U.S. East Coast Cold to Provide Energy Markets With Demand BoostBrian K. Sullivan
Frigid Arctic air may clamp down on the U.S. East Coast and Midwest next week, increasing demand for heating fuels.
Computer models show that temperatures across the regions will be 5 degrees Fahrenheit (2.8 Celsius) below normal from Jan. 19 to Jan. 23, said Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland.
“Over the weekend, the models held to delivering an impressive piece of Arctic air into the U.S.,” Rogers said in a note to clients. “Some debate continues as to how much of this cold also reaches the South.”
The cold air may provide the season’s strongest boost to natural gas prices. Futures for the fuel, used to heat about 50 percent of the nation’s households, rose to a two-week high today on forecasts for cold weather.
Gas-weighted heating degree days may show that next week will be the season’s peak so far for energy use, according to MDA Weather Services in Gaithersburg, Maryland.
The values are calculated by subtracting the daily average temperature from a base of 65 degrees to show energy demand. Higher values mean cooler weather and more energy being used to heat homes and businesses. Gas-weighted values concentrate on population centers that use the fuel for heating.
Forecasters are split how long the low temperatures will remain in the large eastern cities. MDA and Rogers predict the cold will start to fade by the end of the month.
The U.S. Climate Prediction Center said there is a 60 percent chance that below-normal temperatures will persist at least until Jan. 27. Last week, Jon Gottschalck, the center’s head of forecast operations, said there is a chance the cold may linger into February.
Natural gas for February delivery rose 6.4 cents, or 1.9 percent, to $3.391 per million British thermal units at 9:09 a.m. on the New York Mercantile Exchange. The futures are up 27 percent from a year ago, when the U.S. was in the middle of the fourth-warmest winter on record.