Boston and New York - The coldest air in almost 20 years is sweeping over the central US towards the East Coast, threatening to topple temperature records, ignite energy demand and damage winter wheat.
Chicago’s high yesterday was not forecast to reach minus 18ºC and may just hit that today, according to the National Weather Service.
Mike Musher, a meteorologist with the US Weather Prediction Center in Maryland, said 90 percent of the contiguous US would be at or below freezing point yesterday. (The contiguous US comprises those states south of Canada and north of Mexico and excludes Hawaii and Alaska.)
“It definitely looks like one heck of a ‘polar pig’ shot,” said Kyle Cooper, the director of research with IAF Advisors in Houston, using a term for a bulge of cold air out of Canada.
“Models show it as quite intense and dropping down pretty far south.”
Winter storms and frigid air add volatility to commodities trading and spot power markets. Natural gas futures in New York have surged 24 percent since November 1 last year as the coldest start to the US heating season in 13 years boosted fuel demand.
Last week, as snow and cold gripped the US, spot power for New York City jumped more than 11-fold in one hour, while wheat futures climbed the most since mid-October.
“Cold temperatures and gusty winds associated with an Arctic air mass will continue dangerously cold wind chills as far south as… Texas and central Florida,” the National Weather Service said yesterday on its website.
“This Arctic airmass will affect the eastern two-thirds of the country as a sharp cold front moves towards the East Coast.”
Hard-freeze warnings and watches, which are alerts for farmers, stretch from Texas to central Florida.
The frigid temperatures also posed a threat to winter wheat crops in areas that were not covered by a layer of snow to insulate the plants, said Paul Markert, a meteorologist with MDA Weather Services.
“There could be some widespread winter-kill damage in northern Kansas and Nebraska,” Markert said.
Wheat for delivery in March advanced as much as 0.8 percent to $6.105 a bushel (R2 385 a ton) on the Chicago Board of Trade yesterday.
Freezing temperatures spur energy demand as people turn up thermostats to heat homes and businesses. Power generation accounts for 32 percent of US natural gas use, according to the Energy Information Administration.
About 49 percent of all homes use the fuel for heating.
“Everybody’s energy bills will be going up,” Musher said. “I am sure there are going to be multiple records broken across a large part of the country.”
While temperatures crashed in much of the central and eastern US at the end of last week, this week’s cold would have a greater impact because most people were back to work after the holidays, said Michael Schlacter of Weather 2000 in New York.
Readings might be even colder than predicted because forecast models had trouble with extremes, he said. Areas in the east that did not lose their snow cover over the weekend might also have lower readings, Schlacter said.
In addition, wind chill is a cold factor that could not be measured when looking at temperature alone. Wind chill alerts stretch from Montana to Maine and as far south as Texas and Florida.
PJM Interconnection expects power consumption on the largest US grid to jump this week to the highest level in almost four months.
Demand on the 13-state grid, which serves more than 60 million people from Washington to Chicago, would peak at 134 473 megawatts today, the most since September 11 last year, according to a post on Friday on PJM’s website and to grid data compiled by Bloomberg.
Electricity use in New York City would peak today at 7 682MW, the highest since October 7 last year, New York Independent System Operator said on Friday.
The spot price of natural gas for New York City surged last week to the highest level in almost a year.
Teri Viswanath, the director of commodities strategy at BNP Paribas in New York, said the cold wave had been priced into natural gas futures.
“As traders and investors return [this week], our expectation is that prices will likely stay supported,” she said on Friday. “As for power and energy demand, we will see those really skyrocketing.”
Natural gas for February delivery climbed as much as 1.6 percent to $4.375 in electronic trading on the New York Mercantile Exchange yesterday. – Brian Sullivan and Naureen Malik for Bloomberg