Western Price Survey
Week's End Edition
National natural gas prices continued their upward trajectory this week, gaining sharply after the U.S. Energy Information Administration in its weekly storage bulletin reported stocks were lower compared with last year and five years ago.
Working gas in storage reached 1,704 Bcf as of Friday, April 12, according to EIA estimates, a net increase of 31 Bcf from the previous week. This is the first net increase of the injection season. But storage is now 31.8 percent less than a year ago and 4.2 percent less than the five-year average. The West was the only storage region to post a decline, down 1 Bcf.
The report sent front-month gas futures to a fresh 21-month high, noted Enerfax in its April 19 report. "Over the past 2 months, colder-than-normal temperatures have raised heating demand, leading to a sharp decline in storage supplies that has pushed prices higher."
Henry Hub spot natural gas values jumped 17 cents since last Friday, trading April 19 at an average of $4.38/MMBtu. Western prices followed suit, with PG&E CityGate gaining 15 cents to $4.39/MMBtu and Southern California Border up 13 cents to $4.30/MMBtu by April 19. Much of the gain came after release of the storage report.
Western power prices generally followed natural gas values higher. South of Path 15 average peak prices soared $12.50, to $65.50/MWh, in the April 12 to 19 trading period.
Here's how average peak values at other Western hubs have fared since last Friday:
Average off-peak power prices in the West increased between $1.30 and $9.25 in the trading period save for Palo Verde, which lost about 30 cents to $31.15/MWh. Prices April 19 ranged from $28.50/MWh at Mid-C to $51.25/MWh at SP15.
Peak demand on the Cal-ISO grid reached 29,110 MW Thursday, April 18. The week's high use was expected to occur Friday when the grid operator forecast demand could reach 29,212 MW. Northwest Power Pool peak demand reached 51,410 MW Monday, April 15.
What's ahead: Northern California should get some of its warmest weather so far this year as temperatures in San Francisco reach highs of 73 °F by Tuesday, April 23, on a par with expected highs in Los Angeles. Sunny conditions are expected throughout the Pacific Northwest starting April 22, with Seattle temperatures increasing to 72 °F by Thursday and Portland reaching 81°F.
The National Weather Service forecasts an increased probability of above-normal temperatures and below-median rainfall from Washington into Southern California and Arizona between April 24 and May 2 [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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