Western Price Survey
Week's End Edition
A greater-than-expected and unseasonably large withdrawal from natural gas storage finally pushed national inventories below the five-year average.
Working gas in storage reached 1,687 Bcf as of Friday, March 29, according to U.S. Energy Information Administration estimates, a net decrease of 94 Bcf from the previous week. Storage levels are now 31.6 percent less than a year ago and 2.1 percent less than the five-year average.
The agency states that this "is the largest net withdrawal for this time of year since the start of EIA's weekly storage data collection in 2002." It is also the first time since September 2011 that stocks fell below the five-year average.
Traders "reacted very little" to the withdrawal news, Barclays analysts said in an April 5 commodities report. "We expect to see another week of withdrawal in the data before warmer weather in April sets in and really starts the injection season," the report stated.
Recent cold weather has supported prices, according to an April 5 Enerfax report. "Traders, however, are now balancing the likely decrease in stockpiles against weather forecasts that finally signal the onset of milder weather in the weeks ahead," the report noted.
Henry Hub natural gas values lost 5 cents since March 28, trading April 5 at $3.98/MMBtu. Markets were closed March 29 for Good Friday. Western prices, however, moved lower, with Southern California Border gas dropping 23 cents to trade at $3.82/MMBtu and PG&E CityGate down 20 cents to $3.98/MMBtu.
Meanwhile, Western power prices also moved lower. The exception was North of Path 15, which climbed almost $1.70/MWh, ending at $44.70 April 5. Here's how average peak prices at other Western hubs fared since Thursday, March 28:
Average off-peak power prices in the Pacific Northwest lost between $11 and $12 in the trading period, while California hubs gained a dollar or two. Mid-C posted the greatest loss, plunging $12.05 to $15.40/MWh. With Seattle-area weather rainy and relatively warm, hydro production in the BPA area has been peaking near 12,000 MW the past few days. Bonneville wind production peaked near 4,000 MW April 1 and 2.
Peak demand on the Cal-ISO grid reached 29,640 MW Wednesday, April 3, which should be the week's high, according to the grid operator. Northwest Power Pool peak demand reached 48,290 MW April 4.
Unit No. 1 of the Palo Verde Nuclear Generating Station was taken off line starting March 30 for scheduled refueling and maintenance.
What's ahead: Increasingly warmer temperatures and sunny, clear weather are expected throughout California the week of April 8. Los Angeles should reach 80 degrees midweek, while San Francisco could see 73. The National Weather Service forecasts an increased probability of above-normal temperatures in the West from April 10 to April 14. Oregon and California should shift to seasonally normal temperatures between April 12 and 18 [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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