Heating season's peak passes, as natural gas glut expands
The 2012-2013 heating season has been warmer than normal in the large energy-consuming cities of the Northeast and Midwest, cutting demand and prices for natural gas and widening a stockpile surplus in a trend that may last through March.
Temperatures since Dec. 1 have been above average from Minneapolis to Boston, the part of the United States that uses the most energy to heat homes and businesses. The region includes three of the biggest cities, New York, Chicago and Philadelphia.
Gas prices have declined 13 percent from a Nov. 23 peak as a second consecutive winter of higher-than-usual temperatures reduced demand. Mild weather and increased production have caused the surplus to the five-year average to balloon to 12.2 percent in the last week of January from 4.6 percent at the end of November, according to government data.
"We have about 40 percent of the heating market left in the season," said Teri Viswanath, director of commodities strategy at BNP Paribas in New York. "At this point, we need to see really strong persistence in the cold."
The number of heating degree days, a measure of energy demand based on how low temperatures fall, accumulated in New York from Dec. 1 to Jan. 31 was 1,638, 218 fewer than normal, based on a 30-year average compiled by the National Weather Service. The bigger the total, the more fuel is needed to heat homes and businesses. New York's heating degree days value for the period last winter was 1,516.
In Chicago, the 2012-2013 value was 2,069, 365 below normal, while Philadelphia's total was 296 fewer at 1,551. About 50 percent of U.S. homes use natural gas for heating.
The third week of January is usually the coldest of the season. Temperatures this winter have been just a little below last year, which was the fourth-warmest on record in the contiguous U.S., said Matt Rogers, president of Commodity Weather in Bethesda, Md.
"We have definitely had stronger cold spikes this year versus last year, but the warm periods have still dominated," Rogers said in an email.
In December, 1,775 daily high temperature records were set or tied in the U.S., eclipsing 976 in December 2011, according to National Climatic Data Center records. January had 2,370 daily high records set or tied, down from last year's 3,110.
There may be some outbreaks of arctic cold ahead, said Alex Sosnowski, an expert senior meteorologist at AccuWeather in State College, Pa. Those may not be enough to erase the impact of warmer weather that dominated the start of the winter season, which meteorologists measure from Dec. 1 to Feb. 28, he said.
"It looks like the only parts of the nation that are running below normal temperature-wise are Washington state and parts of the West Coast," Sosnowski said. "It's like dragging along a ball and chain. You are not going to erase the positive."
Gas prices plunged to a 10-year low of $1.902 per million Btu last April after as the mild winter crimped demand while production rose to an all-time high.
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