Western Price Survey
January 6, 2017
Despite wet and cold expected across the Pacific Northwest and areas of Northern California into the week of Jan. 9, prices seem to be settling in for what may be a long winter’s nap.
“A bleak outlook on winter demand has hit the market this week, with natural gas prices down more than 12 percent year to date,” noted Enerfax in its Jan. 6 report. “Weather reports show above-normal temperatures spreading across the U.S. over the next two weeks.”
Henry Hub gas spot values tumbled 37 cents between Dec. 29 and Jan. 5, ending at $3.31/MMBtu.
Western natural gas values dropped between 23 cents and as much as 53 cents in trading. Alberta natural gas lost 53 cents to $2.03/MMBtu.
Working natural gas in storage was 3,311 Bcf as of Dec. 30, according to U.S. Energy Information Administration estimates. This is a net decrease of 49 Bcf compared to the previous week.
Storage levels are now 9.9 percent less than a year ago and 0.6 percent less than the five-year average.
Western peak power prices plunged from recent weather-prompted highs, losing between roughly $8 and as much as $35.40 in trading. Mid-Columbia fell from $62.70/MWh, ending at $27.25/MWh by Friday. No trades were posted Monday, Jan. 2, in observance of the New Year’s Day holiday. Prices ranged from $25.45/MWh at Palo Verde to $35.90/MWh at South of Path 15.
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Average nighttime power prices dropped between $3.85 and $7.50. The California-Oregon Border hub saw the greatest loss, down $7.50 to end at $25.25/MWh.
Demand peaked on the CAISO grid at 30,533 MW Jan. 3, which should be the week’s high. Total renewable-energy generation on the grid peaked at 9,804 MW Jan. 1. That same day solar production reached 5,982 MW.
In December, average natural gas prices were significantly higher than those in December 2015 (see “Price Trends,” next page). The average high price at Henry Hub was $3.76/MMBtu, which was about $1.40 higher than in 2015. Prices at Western hubs in December 2016 were 80 cents to $1.10/MMBtu higher than in the same month last year.
Likewise, Western power prices were also higher compared with December 2015 prices. Prices were between $5.80 and $33.65 greater thanks to a weather-driven end-of-the-month price spike. Mid-Columbia, for example, posted a high in December 2015 of $29.05/MWh. Last month’s high price at that hub was $62.70/MWh [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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