Western Price Survey
Week's End Edition
With the end of the natural gas storage season approaching and warmer weather on the horizon for the Western U.S., energy markets remain in limbo.
Working gas in storage reached 2,083 Bcf as of Friday, March 1, according to U.S. Energy Information Administration estimates, a net decrease of 146 Bcf from the previous week. Storage levels are now 14.8 percent less than a year ago and 14.8 percent above the five-year average.
"The withdrawal was above some expectations, invoking short-covering that drove prices to the highest finish since December 6th," noted Enerfax in a March 8 report. "Yesterday's decline suggests demand has been stronger than usual."
Weather forecasts calling for below-normal temperatures to persist the next few weeks could lend support to gas prices, but in the West above-normal temperatures are expected March 13 through March 21, according to National Weather Service forecasts. Only Northern California is forecast to have normal temperatures between March 15 and March 21.
Dry conditions dominated in California throughout January and February, noted the California Department of Water Resources in a March 8 report, although the first week in March saw some relief with a little rain and snow throughout the state. Statewide, the snowpack measured 62 percent of the March 1 average and 54 percent of the historical April 1 average.
Average prices for Henry Hub spot natural gas gained 3 cents since last Friday, trading March 8 at $3.57/MMBtu. Western prices were up a bit more: PG&E CityGate gained 9 cents to $3.88/MMBtu, Southern California Border hopped 8 cents to $3.64 and Malin was up 7 cents to $3.57.
Peak demand on the Cal-ISO grid reached 29,863 MW on March 7, which should be the week's high. Northwest Power Pool use was 55,189 MW Monday, March 4.
Meanwhile, Bonneville Power Administration hydropower has been peaking near 10,000 MW for a few days during the week, surpassing that mark on March 8. Above-normal precipitation is forecast in Washington and Oregon from March 13 to March 21.
With so little support from gas prices or power demand, and significant hydro from the Northwest, spot electricity values moved little. Here's how average peak prices in the West fared since March 1:
Off-peak power prices were mixed and generally flat. Prices March 8 ranged from $28.20/MWh at Palo Verde to $44.60/MWh at SP15 [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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