Western Price Survey
January 8, 2016
The advent of more seasonally typical cold weather across the United States is causing people to turn on the heat.
Domestic natural gas consumption climbed to 129 Bcf/d as of Jan. 7, according to the U.S. Energy Information Administration. This is the highest level since January 2014 and the fifth-highest recorded level since 2005, according to the EIA. Natural gas used for electrical generation increased by roughly 20 percent week over week.
Continued cold weather could keep natural gas use high. In the next two weeks, withdrawals from storage could be nearly 200 Bcf/week, according toEnerfax .
Working natural gas in storage was 3,643 Bcf as of Jan. 1, according to EIA estimates. This is a net decrease of 113 Bcf compared to the previous week and greater than market expectations of 120 Bcf. The Pacific region recorded a 25 Bcf withdrawal during the report week.
Storage levels are now 17.2 percent greater than a year ago and 14.6 percent greater than the five-year average.
Henry Hub gas spot values added 6 cents in Wednesday-to-Thursday trading, ending at $2.35/MMBtu Jan. 7.
But Western hubs' average natural gas values generally moved lower, down between 5 and 20 cents in post-holiday trading. Sumas posted the greatest loss, dropping 20 cents to $2.50/MMBtu between Dec. 30 and Jan. 7. Alberta and PG&E CityGate each added a penny.
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Western peak power prices varied in Dec. 31 to Jan. 8 trading. While Mid-Columbia picked up $1.90 to $26.25/MWh in trading, California-Oregon Border lost $3.15 to $25.10/MWh. Prices at the end of trading ranged from $21.80/MWh at Palo Verde to $35.15/MWh at South of Path 15.
Nighttime power values were down between $2.05 and $3.35, on average, by Friday. Prices ranged from $21.10/MWh at Palo Verde to $24.10/MWh at Mid-Columbia.
On a historical basis, Western natural gas prices were between roughly $1 and $1.35 less per MMBtu on average in December 2015 compared to the same period last year.
Western power prices during December 2015 were also significantly lower -- by between $7.20 and $25.05, on average -- than in the same month in 2014. Mid-Columbia, for example, reached an average high of $54.10/MWh in December 2014, while the average high price at the hub last month was $29.05/MWh [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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