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Western Price Survey

January 17, 2014
Winter Cold Lowers Natural Gas Stores

Extreme winter cold throughout the United States is pushing natural gas storage significantly lower.

Net withdrawals since Oct. 31 are at record levels. To date, about 1,279 Bcf of natural gas has been withdrawn from storage -- the highest level of net withdrawals since the U.S. Energy Information Administration began keeping weekly inventory level records, the agency reports. The next-highest net withdrawal amount is 1,183 Bcf, recorded in the 2000-2001 winter heating season.

Working gas in storage reached 2,530 Bcf as of Friday, Jan. 10, according to estimates, a net decrease of 287 Bcf from the previous week. The withdrawal, influenced by the early-January polar vortex, broke a weekly record for the second time this winter, the EIA said in a Jan. 16 report.

Storage levels are now 20.7 percent less than a year ago and 14.9 percent less than the five-year average. The Western region saw a 31 Bcf withdrawal during the agency's report period.

Western natural gas values have been mild in comparison to some Eastern hubs, but are still tracking Henry Hub price shifts. Henry Hub gas jumped 40 cents since last Thursday, trading Jan. 16 at $4.54/MMBtu. Sumas gas jumped 37 cents to $4.46, and SoCal Border gas was up 31 cents to $4.59.

Western peak-power prices followed suit, with Northwest hubs up between $1.40 and $5.35/MWh in the Jan. 10 to Jan. 17 trading period (see chart). By Jan. 17, average prices ranged from around $39/MWh at Palo Verde to $50 at SP15.

Off-peak prices ended Friday-to-Friday trading mixed, led by Northwest prices, which added about $5/MWh (see chart).

Peak demand on the Cal-ISO grid reached 30,169 MW Jan. 15, which should be the week's high.

Southern California Edison crews have been on standby as firefighters continue battling the 1,700-acre Colby Fire north of Glendora, Calif., in the San Gabriel Mountains. Five homes have been destroyed thus far. The blaze was reportedly 30 percent contained as of Friday, Jan. 17.

What's ahead: Accuweather reports that the polar-vortex pattern, which has brought cold weather to the Midwest and East and drought to California and Oregon, will continue to hold later this month and become even more extreme. The National Weather Service said above-normal temperatures are likely from Washington into Southern California and Arizona Jan. 22-30, although Washington can expect seasonally normal temperatures Jan. 24-30. The region could also see below-normal precipitation [Linda Dailey Paulson].

Archives of the Western Price Survey for the past year are also available online.


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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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