Western Price Survey
Week's End Edition
Western natural gas prices moved lower this week even while peak power posted small gains in Southern California.
Working gas in storage reached 2,996 Bcf as of Friday, Jan. 18, according to U.S. Energy Information Administration estimates, a net decrease of 172 Bcf from the previous week. Storage levels are now 5 percent less than a year ago and 12 percent above the five-year average.
Henry Hub natural gas values lost 13 cents since last Friday, trading Jan. 25 at $3.41/MMBtu. Western prices followed suit, with SoCal Border gas shedding more than 6 cents to $3.58/MMBtu, and Malin natural gas dropping about 11 cents to $3.49 over the trading period.
The weather at present is the only factor pushing gas prices higher, according to Barclays analysts, who in a weekly commodities report pointed to extreme cold and higher regional prices in the Northeast. However, "as temperatures start to rise in the Western region of the country, we have already observed a recovery in production in the last week."
Looking into February and March, analysts predict that gas prices might fall further from additional nuclear generation and some year-to-year natural gas production growth, particularly from increased shale-gas production.
Here's how average prices for peak power fared at Western hubs since last Friday:
Markets were closed Monday in observance of the Martin Luther King. Jr. holiday.
Off-peak power prices gained between 70 cents and $2.85 on average compared to the previous Friday. COB posted the greatest gains, up about $2.85 since Jan. 18. Average prices for off-peak electricity in the West on Jan. 25 ranged from about $24.90/MWh at Palo Verde to $40.25/MWh at SP15.
Peak demand on the Cal-ISO grid reached 30,587 MW Wednesday, which should prove the week's high use, according to the grid operator. Northwest Power Pool demand reached 61,668 MW Monday.
What's ahead: Cloudy skies with possible showers and temperatures in the 40s are expected Monday through Thursday in Seattle and Portland. The San Francisco area should be sunny with daytime temperatures in the 50s through Thursday, while Los Angeles-area temperatures should be in the 60s Tuesday through Thursday under sunny skies.
The National Weather Service forecasts an increased probability of above-normal temperatures throughout California from Jan. 30 to Feb 3. The warmer conditions are expected to persist in the West, extending into Oregon and Arizona Feb. 1 through Feb. 7 [Linda Dailey Paulson].
* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.
Archives of the Western Price Survey for the past year are also available online.
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