Western Price Survey
August 7, 2015
Temperatures and power prices across the West cooled in July 31 through Aug. 7 trading.
Peak power prices lost between $1.90 and $5.30 in the trading week, with California-Oregon Border falling about $5 to $32/MWh by Aug. 7. Average daytime prices ranged from $29.95 at Mid-Columbia to $37/MWh at South of Path 15.
Pacific Northwest nighttime power prices lost be-tween $6.25 and $7.75, on average, while Palo Verde shed 55 cents. Average off-peak prices at the end of the trading week ranged from $22.85 at COB to $26.10 at Palo Verde (see chart).
Working gas in storage reached 2,912 Bcf as of July 31, according to U.S. Energy Information Administration estimates, a net increase of 32 Bcf from the previous week. Storage levels are now 22.5 percent greater than a year ago and 2.2 percent greater than the five-year average. The increase was less than market expectations of a 42 Bcf injection.
In natural gas markets, Henry Hub gas spot values dropped 9 cents in Thursday-to-Thursday trading, ending at $2.76/MMBtu Aug. 6. Western natural gas prices shed between 2 and 6 cents in trading. PG&E CityGate managed to stay above the $3 mark over the week (see table).
Overall, the 1,436 Bcf added to the national natu-ral gas inventory since April is 20 percent greater than the five-year average for that time span, yet remains 7.5 percent behind the record levels of 2014. The EIA attributes this to the warmer weather between April 1 and July 31 and increased natural gas use for power generation.
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Natural gas inventory levels may reach 4 Tcf by the end of October, according to Barclays analysts. They lowered the firm's 2016 natural gas price fore-cast to $2.95/MMBtu from $3.60/MMBtu.
"Things will get worse before they get better," noted the analysts. "Warm summer weather has sup-ported the market. This is likely to be short-lived as we head into the shoulder season with record inven-tory levels." The record inventory plus forecasters' expectations of an El Niño winter should place downside risk on 2016 prices.
California retail residential power prices were 31.7 percent higher than the U.S. average for the first five months of 2015 at 16.36 cents/kWh, according to data from the Center for Jobs and the Economy. Commercial prices for that same period were 34.7 percent higher, while industrial prices were 59 percent higher at 10.65 cents/kWh.
Archives of the Western Price Survey for the past year are also available online.
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