Western Price Survey
January 9, 2015
As 2015 opened, some U.S. areas hit records for natural gas use, but warm weather in the West kept a lid on the region's gas prices.
The U.S. Energy Information Administration noted natural gas consumption rose to 129 Bcf/d on Jan. 7, the highest level in a year, and the fifth-highest recorded level since 2005. All sectors saw increased demand; consumption by the power sector jumped roughly 20 percent week over week.
Working gas in storage reached 3,089 Bcf as of Jan. 2, according to EIA estimates, a net decrease of 131 Bcf from the previous week. Storage levels are now 8.8 percent greater than a year ago and 2.1 percent less than the five-year average. During the report week, the West withdrew 33 Bcf from stores.
Natural gas values fell, with Henry Hub gas spot values eroding 3 cents since Dec. 31 to trade Jan. 8 at $2.91/MMBtu. Western natural gas prices followed suit, dropping between 12 and 39 cents by Jan. 8. Sumas was down 39 cents to $2.67.
Expectations of mild weather ahead may mean smaller natural gas withdrawals. According to Enerfax, analysts expect the gap between current supply levels and the five-year average natural gas stores to close within weeks as a result.
Western peak power prices were mixed in the Jan. 2 to Jan. 9 trading period, with most hubs not moving much on a week-to-week basis (see chart). Average daytime prices by Friday ranged from $23.50/MWh at Mid-C to $37.15 at South of Path 15.
Off-peak prices, by contrast, fell a few dollars, led by Palo Verde, which was down $4.05 to $23.75. Average off-peak prices Friday ranged from $19.95/MWh at Mid-C to $31.40 at SP15.
Western natural gas prices as a whole were significantly lower in December 2014 compared to December 2013, and average high prices last month were significantly less than the five-year average mark. The higher 2013 energy prices were the result of an early December 2013 cold snap. For power, average prices at Western hubs during December 2014 were also less than last year (see "Price Trends," next page).
Columbia Generating Station produced a record 9.5 million MWh of nuclear power in 2014, according to Energy Northwest. The prior record of 9.3 million MWh was set in 2012. The next refueling outage for the facility is scheduled to begin May 9 [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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