Western Price Survey
Week's End Edition
This week has been a drumbeat of bad news. Retail sales, a huge driver of the economy, had their biggest monthly drop in over three years, housing starts fell to a 17-year low and industrial production posted its biggest drop since 1974.
The International Monetary Fund expects the American economy to grow by a measly 0.1 percent next year, according to the bank's recent economic outlook. The National Bureau of Economic Research, the official arbiter of recessions, increased the chance of a recession from 51 percent to 90 percent
Energy demand has ebbed as manufacturers cut back production and consumers cut spending. Oil prices closed at $69.85 a barrel Thursday -- a fresh 14 month-low -- on plump supplies. Americans used less oil last month than in any month since July 1999.
Goldman Sachs, considered an oil bull, trimmed its outlook for natural gas prices this winter from $9.50/MMBtu to $7.60/MMBtu due to sinking oil prices. On Monday, the investment bank reduced its crude year-end forecast from $115 a barrel to $70, and cautioned prices could sink as low as $50.
Cooler temperatures and lower supply injections bumped up natural gas prices across much of the country and helped propel natural gas futures higher to $6.82/MMBtu on Friday, but that was a gain of only 14 cents for the week.
In the Lower 48 states, natural gas storage rose last week to 3.277 Tcf, up by 79 Bcf through last Wednesday, the U.S. Energy Information Administration said. The injection put storage 2.7 percent above the five-year average but was still less than year-ago levels.
In the West, however, mild weather helped to shave natural gas prices, unlike the rest of the country. Supplies climbed by 8 Bcf to 440 Bcf, nearly even with year-ago levels. Compared to the five-year average, levels are 4 percent higher.
Western natural gas prices were flat, trading 20 cents in either direction. Prices ranged from a low of $2.86/MMBtu at the San Juan Basin to $6.45/MMBtu at Pacific Gas & Electric's CityGate. Only a few trading centers saw large drops, such as the SoCal border, which fell $1 to an average of $3.32.
Average daytime California prices diverged across the state this week, with North of Path 15 dropping $3 to $54.86/MWh, and South of Path 15 rising $4 to $50.15/MWh. Nighttime trades climbed less than $1 to $45.02 in the north but gained $6 in the south to $37.93/MWh.
Power demand in the Golden State kept steady through Tuesday at 30,500 MW, the California Independent System Operator said, but shot up to 32,500 MW by Thursday. Friday power demands were expected to climb to 33,300 MW.
The Santa Ana winds finally died down this week and helped firefighters contain wildfires burning across Southern California. A high risk for fires remains in the area through because of a high pressure and warm temperatures parked over the area, AccuWeather said.
The Sesnon fire in Los Angeles County, one of the largest, was sparked when high winds downed a private power line. There were only minor power outages with about 3,000 people losing electricity.
A cool front advances into the region this weekend and will push temperatures down into the 70s in Los Angeles and San Francisco. Temperatures were expected to remain in the mid 90s through the weekend in Phoenix and were boosting power prices. Palo Verde average peak trades rose $10 to $44.31/MWh, while off-peak values increased $9 to $34.47/MWh.
Spotty showers and cooler temperatures are in store for the Pacific Northwest this weekend, with temperatures in the high 50s in Seattle and low 60s in Portland. Mid-Columbia average prime values eked out a nearly $2 gain to end the week at $51.40/MWh, while off prime values gained $6 to $45.07/MWh.
Average California-Oregon border peak prices were nearly static, closing at an average of $55.56/MWh. Off-peak trades climbed $4 to an average of $46.
The San Onofre Nuclear Generating Station's third unit was off line Tuesday to repair the condenser's water pump. The 1,080 MW unit is expected to be closed as part of a planned seven-week maintenance and refueling outage. Palo Verde's No. 1 1,336 MW unit is also closed for nearly two months for refueling and planned maintenance [Kristina Shevory].
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