NEW YORK, July 15 (Reuters) - With a heatwave set to blanket the U.S. Northeast and much of the eastern United States this week, natural gas prices in the region rose to their highest level of the summer on Monday.
In addition, gas pipeline companies warned shippers to carefully monitor their scheduled supplies in order to maintain system integrity.
The Weather Channel’s weather.com said a heatwave would build this week in the Northeast, Ohio Valley and Great Lakes as a large dome of high pressure brings hazy, hot and humid conditions to the areas.
Temperatures are set to top out in the mid-90s degrees Fahrenheit (35 degrees Celsius) through Thursday in New York City, Philadelphia and Washington, D.C., with heat index values that measure humidity reaching into the upper-90s and low-100s F.
Boston and other New England cities were seen in the low-90s F, the forecaster said.
Next-day prices on the Transco gas pipeline at the New York citygate jumped more than $1 to an early average over $5 per million British thermal units on the heat, their highest price and first time over $5 since a late-winter cold spell in early April. New York prices topped out last winter at $38 in January.
The last time prices were over $5 in the summer was in 2011, as new pipeline capacity and production from the nearby Marcellus Shale has helped to limit what had been historically volatile prices in New York City.
However, in some periods of high demand during both the summer and winter, prices still tend to spike.
Gas traders said New England prices traded in the $5.50 area to over $8 on the Algonquin Gas Transmission system.
Spectra Energy’s Algonquin unit said due to the warm weather and forecasted high demand, it required all shippers and system operators to carefully review demands for gas and schedule it consistent with daily needs.
The company said in a website posting that it would utilize provisions to protect system integrity including the issuance of OFOs, or operational flow orders, which typically require shippers to balance daily supply and demand within a specified tolerance band.
The Algonquin system carries gas throughout New England, while the Williams’ owned Transco system carries gas from the Gulf Coast to markets throughout the Southeast, mid-Atlantic and Northeast, including New York City.