Tags: blizzard | power | prices | energy

Power, Natural Gas Prices Spike Amid Blizzard Fears, Frigid Weather Forecast

Power, Natural Gas Prices Spike Amid Blizzard Fears, Frigid Weather Forecast
(Getty)

Tuesday, 14 March 2017 09:57 AM

A slight wobble in the path of a late-winter storm will mean more rain and sleet and less snow than predicted for New York and the U.S. East Coast even as the system grows in strength on its journey north.

Washington received about 2 inches (5 centimeters) of snow while New York will see as much as 6 inches, according to the National Weather Service. Some earlier forecasts called for as much as two feet in Manhattan. The weather service canceled a blizzard warning for New York City, though a coastal flood warning for tides that could be 3.5 feet (1 meter) higher than normal remains in effect. More than 115,000 homes and businesses in eastern U.S. states were blacked out as of about 8:45 a.m, according to data compiled by Bloomberg from utility websites.

The storm packing wind gusts of up to 60 miles per hour, forced airlines to cancel thousands of flights, while wholesale power prices surged and natural gas futures gained as the system spins up the Atlantic Coast. German Chancellor Angela Merkel delayed her trip to Washington, and President Donald Trump tweeted a picture of himself meeting with Washington Mayor Muriel Bowser about the storm, advising those in its path to be safe.

“The low is a little farther inland, we’re talking miles, and it makes all the difference,” said Patrick Burke, a senior branch forecaster at the U.S. Weather Prediction Center in College Park, Maryland. “That is the difficulty we live with with all of these storms. In terms of the amount of liquid that is falling out of the sky, we did that very well, it’s just a question of how much has fallen as snow.”

Even without the high snowfall total, the powerful storm poses risks. About half of the early blackouts were in Virginia, with power failures spreading northeast through the morning into Maryland, Delaware, southeastern Pennsylvania and southern New Jersey. Dominion Resources Inc., owner of Virginia’s largest utility, reported about 54,000 without power and Rappahannock Electric Cooperative had about 5,300 blacked out.

Amtrak suspended all rail service between New York and Boston, as well as to Albany, the federally-run railroad said in a statement.

New York and Boston closed public schools, commodities and stock markets were still set to open and the federal government said it would open after a 3-hour delay. Traders were watching shares of transportation companies and retailers that may decline because of the disruptions.

Burke said the storm will intensify between New York and Boston and a powerful winds will rake the coastal areas. The storm will be followed by more cold, with low temperatures in New York and Boston dropping to 18 degrees (minus 8 Celsius) Fahrenheit Wednesday. Those readings could feel even colder because of the wind that will linger, Burke said.

This isn’t the first time a shifting storm track has foiled meteorologists’ forecasts -- and it wouldn’t be the first time the rain-snow line snared them. In January 2015, outlooks called for New York to receive as much as 36 inches during one blizzard and less than 10 inches ended up falling in Central Park.

The tricky part in forecasting this type of storm is that air over the ocean is warm, so any change in the system’s track up the coast will drag more of that over land, changing the precipitation from snow to rain, Burke said

‘Pretty Strong’

While it might seem late in the season for a big dump, it’s not out of the ordinary, said Marc Chenard, a forecaster at the Weather Prediction Center. “We thought we could get out of the winter without this, but that’s not going to happen.”

New York has been hit by massive March storms many times. The Blizzard of 1888, which killed 400 across the Northeast and 200 in the city alone, ranks at the top of the historic list, according to Weather Underground in Ann Arbor, Michigan. “This is historic in the sense that we are adding to history, but not unprecedented,” said Brian Hurley, senior branch forecaster at the Weather Prediction Center.

Intercontinental Exchange Inc.’s New York Stock Exchange said Monday that it expected business as usual Tuesday, as did Nasdaq Inc.’s markets. JPMorgan Chase & Co. said it expected its corporate office and the majority of Northeast branches to close Tuesday. American Express Co. advised employees at its headquarters in downtown Manhattan to work from home.

Fuel Demand Up

The cold sweeping into the region pushed April natural gas futures up to $3.063 per million British thermal units on the  New York Mercantile Exchange earlier Tuesday, though gas fell back to $3.025 as of 9:06 a.m.

Electricity at a benchmark in the eastern U.S. known as the Western hub meanwhile jumped 16 percent for day-ahead delivery to $52.95 a megawatt-hour.

Fuel demand was increasing in the U.S. Northeast and Great Lakes regions as consumers bought supplies ahead of the storm, energy distributor Mansfield Energy said in an online update.

“The weather is pretty strong,” Cody Moore, president of BioUrja Group’s power trading division in Houston, said in an email. “Our meteorologist says these are the strongest deviations from normal of the entire winter.”

Canceled Flights

Amtrak suspended Acela train service between Boston and New York and cut back its schedule to Washington. More than 7,827 flights across the U.S. were canceled since Monday, FlightAware, a Houston-based airline tracker, said. The storm tracked across the Midwest bringing snow and grounding flights in Chicago as it moved east.

The threat to travel caused Innophos Holdings Inc. in Cranbury, New Jersey, and EPAM Systems Inc. in Newtown, Pennsylvania, to postpone shareholders’ meetings. The House of Representatives won’t schedule votes for Tuesday in addition to the 3-hour delay to the opening of the federal government. The German chancellor’s trip to Washington for talks with Trump was postponed until March 17, White House spokesman Sean Spicer said.

Roof Claims

Winter storms and cold waves can mean insurance claims from roof collapses, broken pipes and business interruption. The S&P 500 Property & Casualty Insurance Index slipped on Monday. Travelers Cos., which has substantial operations in the U.S. Northeast, was among the biggest decliners.

New York fruit growers may be beneficiaries of the storm, said Marvin Pritts, a horticulture professor at Cornell University in Ithaca, New York. Snow provides moisture and an insulating blanket for low-growing crops. Record warm temperatures in February had coaxed many plants out of winter dormancy, increasing the chances freezing readings would damage them.

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Economy
Power, natural gas prices rallied on call for frigid weather; Tens of thousands are without power as storm tracks north
blizzard, power, prices, energy
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2017-57-14
Tuesday, 14 March 2017 09:57 AM
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