Houston — US Northeast power generators have burned through more than 630,000 barrels of oil so far this year, or about 9,400 b/d, down about 11% from the same period in 2014, the latest ISO New England data shows.
Recent bouts of frigid temperatures increased the oil burn by generators but overall demand has been down from 2014, according to ISO New England data, published Wednesday. The ISO handles the electricity markets and grid operation for Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.
Northeast power utilities consumed 80% of their 2015 oil demand in the past month. Even so, it was not enough to put 2015 over 2014 demand, in which spiking spot natural gas prices made the switch to oil for power generation an easy decision.
Spot natural gas prices have not seen in 2015 the spikes of Q1 2014. Transco Zone-6 New York spot gas was trading around $2.80/MMBtu on Thursday while Algonquin city-gates, a proxy for New England, was trading around $3.88/MMBtu. That compares to $9.45/MMBtu for New York Harbor utility-spec 0.3%S HP fuel oil, per Platts assessments Wednesday.
Spot gas prices have been less than New York Harbor fuel oil prices for one week, Platts data show, a trend that all but removes the incentive for dual-fuel generators to switch from natural gas to residual fuel oil or other oil products.
In 2014, spot gas prices spiked as high as $124/MMBtu in New York, according to Platts data.