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Western Price Survey

August 5, 2016
An Odd Withdrawal of Natural Gas

Increased use of natural gas for power generation led to a rare net withdrawal from natural gas storage at the end of July.

Working natural gas in storage was 3,288 Bcf as of July 29, according to U.S. Energy Information Administration estimates. This is a net decrease of 6 Bcf compared to the previous week.

This is only the third time, notes the agency, that net withdrawals from working gas stocks were reported on a national basis during the summer months. The other two events occurred in 2006.

“The net withdrawal on the national level resulted from two key factors: relatively small injections in the East and Midwest regions and large withdrawals from storage in the South Central region,” notes the EIA in its weekly report. “The Pacific region also reported a net withdrawal of 4 Bcf for the week.”

Henry Hub gas spot values gained 13 cents in Thursday-to-Thursday trading, ending at $2.89/MMBtu Aug. 4.

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Natural gas prices at Western hubs added between 8 and 15 cents over the trading week, but Southern California Border fell 25 cents to end at $2.86/MMBtu Thursday.

Peak power prices varied, with Palo Verde gaining $9 to reach $40.85/MWh, on average, while California-Oregon Border daytime values dropped $3.30 to $30.70/MWh in July 29 to Aug. 5 trading.

Average nighttime power prices fell between $6.35 and as much as $11 in trading. California-Oregon Border posted the greatest loss, down $11 to $23/MWh.

Demand peaked on the CAISO grid at 44,856 MW July 29. During the week of Aug. 1, demand reached a high of 41,235 MW.

Natural gas used for power generation was high at more than 40 Bcf/d on three separate days in late July, noted the EIA. Nine of the 10 highest natural gas-use days on record occurred in July 2016; one was in 2015.

Average natural gas prices in July varied compared to the same month last year. The average high price at Henry Hub was identical at $2.94/MMBtu, while Southern California Border was 39 cents higher and Malin 17 cents lower.

Average Western power prices for July were sharply divided. While South of Path 15 and Palo Verde values were roughly $11 greater per MWh compared to the same month in 2015, Northwest hubs were between $3 and $5.35/MWh lower than in July last year (see “Price Trends,” next page). –Linda Dailey Paulson [Dailey Paulson].

Archives of the Western Price Survey for the past year are also available online.

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Chris Raphael, editor with questions regarding Price Survey content.

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