Colder-than-normal weather in New England and the Middle Atlantic drove March Northeast natural gas prices to more than double those of year-ago levels as relatively mild conditions kept prices in the rest of the country at a deficit to those of the Northeast.
According to the U.S. National Oceanic and Atmospheric Administration, New England gas home heating customer-weighted heating degree days, a proxy for space heating demand for natural gas, were up 13.3% versus normal and 38.8% versus the prior year during the month. Those of the Middle Atlantic region climbed 7.4% and 42.3%, respectively, versus normal and the year-ago period, while the continental U.S. saw heating degree days decline 6.9% versus normal but rise 22% versus the prior year.
The demand-side support for prices overwhelmed year-over-year production growth in the Northeast, as the latest government estimates have the region's shale gas production climbing to new records. The U.S. Energy Information Administration's latest drilling productivity report pegged Marcellus production at a record 19 Bcf/d in March, up 4.4% year over year, and the government agency projects production will grow to 19.2 Bcf/d in April. In the Utica region, EIA estimates show shale gas production surged 12.1% year over year in March to 4.2 Bcf/d with the government agency projecting the region's production will reach a record 4.3 Bcf/d in April.
Spot natural gas prices in the Northeast climbed 112.2% year over year to average $3.252/MMBtu, while spot natural gas prices in the rest of the U.S. averaged $2.678/MMBtu, up 68.5% year over year.
The year-over-year surge in Northeast prices was seen in both consuming and producing areas of the region, with spot prices reaching higher levels at demand centers. Tennessee at Dracut posted an average of $4.523/MMBtu during the month, up 126.1% year over year and up 15.4% versus the prior month. At the same time, Leidy saw spot prices remain relatively flat versus the prior month but jump 142% year over year to $2.520/MMBtu.
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