Western Price Survey
March 13, 2015
Without cold weather to support prices, Western energy values remain limp.
This is particularly true of natural gas prices, for which weather has and continues to be "the only tangible support," according to Barclays analysts, writing in a March 10 market report. Natural gas production levels may make the market vulnerable to a sell-off that could affect prices should the weather become "sharply warmer sooner than expected."
In fact, a greater probability of above-normal temperatures is expected through March across the Western U.S., according to the National Weather Service. This doesn't bode well for the already low snowpack. The statewide snow-water equivalent in California, as of March 12, is 4.7 inches, or 17 percent of average.
In the Northwest, continued warm conditions have led to the accumulated snow "sliding off the hill," according to the Northwest River Forecast Center.
There is only a slight chance of rain in San Francisco March 16-18. Temperatures across the region are expected to be above normal.
Working gas in storage reached 1,512 Bcf as of March 6, according to U.S. Energy Information Administration estimates, a net decrease of 198 Bcf from the previous week. Storage levels are now 46.9 percent greater than a year ago and 13.0 percent less than the five-year average.
Henry Hub gas spot values retreated 44 cents since March 5 to trade March 12 at $2.82/MMBtu. Western natural gas prices fell between 7 and 18 cents in Thursday-to-Thursday trading. Alberta and PG&E CityGate proved the exception, adding 4 cents each to hit $2.06/MMBtu and $3/MMBtu, respectively. El Paso-Permian natural gas posted the greatest loss, down 18 cents to end at $2.48/MMBtu.
Western power prices -- both peak and off-peak -- varied little in March 6-13 trading. Peak power prices tended to stay under $35/MWh at California hubs and under $25 at Northwest hubs (see charts).
Peak demand on the Cal-ISO grid reached 29,132 MW March 12, which should be the week's high. Northwest Power Pool demand reached the week's high of 52,159 MW March 9.
The grid operator reported total renewables reached 8,647 MW on March 12 [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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