Houston — Oil-fired power generation for the week ended Sunday increased, according to ISO New England data released late Wednesday, but burning in January still lagged behind levels in 2015.
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Around 9,784 barrels of oil were used for power generation from January 18 through Sunday, up from around 1,462 barrels used the previous week. Sources on the US Atlantic Coast said the winter storm that hit the area over the weekend resulted in a pickup in oil-fired power generation. Despite the increase, utilities have used far less oil for power generation compared with 2015.
Around 21,800 barrels of oil had been used for power generation purposes so far in January, or 0.55% of the total energy output. In the same time frame in 2015, around 101,950 barrels of oil had been burned for power generation, nearly 2.3% of the energy output.
Low sulfur fuel oil, which is used by utilities when natural gas prices often spike in the winter, has remained in tanks, with natural gas prices holding at low, steady prices. Algonquin city-gate next-day natural gas was assessed Wednesday at $3.545/MMBtu, compared with $9.105/MMBtu on the same day in 2015 and $73.025/MMBtu in 2014.
One USAC source said there had been a potential for oil-fired power generation to pick up if crude prices kept falling, but the rebound this week all but killed that hope. The source said that there is currently so much LSFO available in tanks that suppliers will likely hold onto the barrels for next year, and not need to import additional supply in preparation for next winter.