• Tony Zelinski

The average daily spot natural gas price declined about 40% during winter 2019–20 in New England


US electricity generation

The average spot (wholesale) price of natural gas in New England for winter 2019–20 (November 1, 2019–March 31, 2020) was $3.17 per million British thermal units (MMBtu), down about 40% from $5.40/MMBtu for the winter of 2018–19 based on trends at the Algonquin Gas Transmission (Algonquin) Citygate—a key regional benchmark for natural gas prices in New England. This price was the lowest average price of natural gas since the winter of 2015–16, which (like winter 2019–20) was warmer than normal.


The high price of spot gas for the winter of 2019–20 was $14.50/MMBtu in late December 2019, and the low price of spot gas was $1.20/MMBtu toward the end of March 2020. At no time during January 2020 did the daily spot price of natural gas at the Algonquin Citygate equal or exceed $10/MMBtu, according to price data from S&P Market Intelligence. The National Oceanic and Atmospheric Administration reported that January 2020 was the fifth-warmest January on record. In recent years, many days in January and February have reflected the material natural gas price volatility in New England. This price volatility often results from temperature-driven constraints on the interregional natural gas pipeline network, which have resulted in high episodic prices. However, during January 2020 the average daily spot natural gas price at the Algonquin Citygate was $3.08/MMBtu.


This price was the lowest average price of natural gas since the winter of 2015–16, which (like winter 2019–20) was warmer than normal.



Contributing factors to the decline in average daily spot natural gas prices in New England include the following:

  • Temperatures were warmer than normal.

  • Cumulative winter heating degree days (HDDs) in New England were down in 2019–20 about 5% compared with the most recent 10-year average, and cumulative HDDs were down about 9% compared with winter 2018–19.

  • As a result of warmer than normal temperatures, estimated regional daily natural gas demand during winter 2019–20 (the navy line in the chart below) decreased by about 0.2 billion cubic feet per day, or 5% compared with the winter of 2018–19 (the light blue line).

  • Natural gas volumes on the Tennessee Gas Pipeline and the Algonquin Gas Transmission pipelines at key flow points moving natural gas into New England were down about 3% this past winter.

  • Average daily natural gas generation increased about 4% in the Independent System Operator of New England (ISO-NE) region despite average system peak loads decreasing about 6% because of lower spot natural gas prices, reduced congestion on key natural gas pipelines, and a 13.6% decrease in nuclear output in ISO-NE as a result of the closure of the Pilgrim nuclear station in May 2019.



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