Western Price Survey
January 16, 2015
All sectors reported increased demand for natural gas earlier this month, driving consumption up to 111 Bcf/d for the week ending Jan. 14. Consumption by the power sector increased roughly 3 percent week over week.
Still, given current natural gas production levels, which are expected to continue rising, analysts expect gas storage levels to continue increasing. Only "record-breaking" demand would prevent an oversupply condition "now developing in the market," according to Enerfax.
Working gas in storage reached 2,853 Bcf as of Jan. 9, according to U.S. Energy Information Administration estimates, a net decrease of 236 Bcf from the previous week. Storage levels are now 11 percent greater than a year ago and 3.8 percent less than the five-year average.
Natural gas values rose, with Henry Hub gas spot values jumping 38 cents since Jan. 8 to trade Jan. 15 at $3.29/MMBtu. Western natural gas prices followed suit, adding between 19 cents and 34 cents by the end of trading. PG&E CityGate gained the most, up 34 cents to end at $3.51 on Jan. 15.
Meanwhile, average prices for Western peak power didn't move much in the Jan. 9 to Jan. 16 trading period. Northwest hubs gained less than a dollar in trading, while Palo Verde values lost $1.70, ending at $25.35/MWh. Average daytime prices ranged from $24.15/MWh at Mid-C to $26.60/MWh at Palo Verde.
Neither North of Path 15 nor South of Path 15 posted trades on Friday.
In terms of average off-peak prices, Palo Verde was down $1.50 to $22.25/MWh, while COB added 30 cents to $22.55. Average off-peak prices Friday ranged from $19.10/MWh at Mid-C to $22.55/MWh at COB.
Peak demand on the Cal-ISO grid reached 29,588 MW Jan. 15, which should be the week's high. Northwest Power Pool demand reached 58,654 MW that same day.
Wind production reported by both Cal-ISO and the Bonneville Power Administration was relatively flat during the week. Cal-ISO wind power topped out at 1,943 MW Jan. 12, for example, while BPA figures show wind power remained low from Jan. 10 but reached 4,000 MW by 11:25 a.m. on Jan. 16.
What's ahead: The February weather forecast remains uncertain, according to the National Weather Service's 30-day outlook. The only area of agreement among the forecast models is the expectation of above-average temperatures across the Western U.S. [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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