Western Price Survey
October 4, 2013
Power prices at most Western hubs saw only modest gains at the start of October with mild weather and continued additions to natural gas storage.
As the end to the storage season nears -- and without weather extremes prompting energy use for either heating or cooling -- it appears natural gas will continue to be laid away for winter.
Working gas in storage reached 3,487 Bcf as of Friday, Sept. 27, according to U.S. Energy Information Administration estimates, a net increase of 101 Bcf from the previous week. Storage levels are now 4.3 percent less than a year ago and 1.4 percent greater than the five-year average.
The addition was greater than market expectations, which were reportedly around 95 Bcf.
"The storage gain was the biggest in any week on a volume basis since May and was the highest for this week since 2003," noted Enerfax in its Friday report. "Continued moderate temperatures ensures ample supplies by the end-October start of the heating season."
Despite healthy storage, Henry Hub natural gas values gained almost 6 cents since last Friday, trading Oct. 4 at $3.55/MMBtu. Western prices also rose, with Malin gas adding 18 cents to $3.51/MMBtu and Southern California Border gaining 14 cents, trading at $3.56 Friday. PG&E CityGate, by contrast, was up a modest 3 cents to $3.86.
Daytime power prices in the Pacific Northwest added between $4 and $6 on average in the Sept. 27 to Oct. 4 trading period, while prices at SP15 were relatively flat, ending at almost $44/MWh Oct. 4.
Peak demand on the Cal-ISO grid fell by roughly 1,450 MW from last week's high to 32,058 MW Sept. 30, according to the grid operator.
Looking back at September, peak-power prices at Pacific Northwest hubs reached higher than the September 2012 spread, while California prices tightened. Meanwhile, natural gas prices in the West trended higher compared to September 2012 (see "Price Trends," next page).
What's ahead: The National Weather Service forecasts an increased probability of normal temperatures from Washington through California from Oct. 9 through Oct. 13. During this same period, Arizona should have below-normal temperatures. Below-median precipitation is also expected for the West Coast during the period [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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