Western Price Survey
January 5, 2018
A blanket of Arctic cold enveloped much of the U.S. this week, sending temperatures down and energy use up across the country.
Single-day total natural gas use reached a record high of 150.7 Bcf Jan. 1, according to the U.S. Energy Information Administration, topping a January 2014 record of 143.3 Bcf. National natural gas use increased 26 percent week over week, according to the EIA. Natural gas used for power generation increased 18 percent.
Analysts at Barclays anticipate two more weeks of large gas withdrawals, and expect this winter to be colder than the five-year average.
Henry Hub natural gas spot values jumped $1.44 to $4.22/MMBtu between Dec. 28 and Jan. 4.
Working gas in storage was 3,126 Bcf as of Dec. 29, according to EIA estimates. This is a net decrease of 206 Bcf compared to the previous week. Storage levels are now 5.8 percent less than a year ago and 5.8 percent less than the five-year average.
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In the West, natural gas prices varied in Thursday-to-Thursday trading. Opal gas gained the most among Western hubs, adding 41 cents to reach $3.29/MMBtu. Stanfield and Alberta natural gas were the exceptions, with Alberta gas dropping 64 cents to $1.45/MMBtu by Jan. 4.
Western daytime power prices posted gains of between $8.55 and as much as $12.75/MWh between Dec. 28 and Jan. 4. California-Oregon Border gained the most in the trading period, up $12.75 to $38.50/MWh.
Off-peak values followed suit, with prices up between $6.35 and $9.50 by Jan. 4. Palo Verde gained the most, up $9.50 to $33.50/MWh by Jan. 4.
Power demand on the California Independent System Operator grid reached 28,948 MW Jan. 3, the week’s high.
In December, average natural gas prices were generally lower compared with 2016 (see “Price Trends,” next page). Below- or near-freezing conditions in 2016 sent prices higher. The average high price at Henry Hub in 2017 was $2.96/MMBtu, 80 cents less than in 2016.
Western natural gas prices were roughly $1 less year over year. Southern California Border was the exception, adding 55 cents in December 2017, with an average high price of $4.34/MMBtu.
Average Western power prices in December were between $3.20 and as much as $27.50 less in 2016. South of Path 15 was the exception, up $8.80 in December 2017 with an average high price of $56.40/MMBtu. –Linda Dailey Paulson.
Editor’s note: Due to a change this year in data sources, the Western Price Report will now report power prices on a Thursday-to-Thursday basis.
Archives of the Western Price Survey for the past year are also available online.
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