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Western Price Survey

October 23, 2015
Natural Gas Values Drop Sharply as Gas in Storage Surges

Gas prices remained low this week as the amount of gas in storage continues to grow. Working natural gas in storage reached 3,814 Bcf as of Oct. 16, according to Energy Information Administration estimates, a net increase of 81 Bcf from the previous week.

Gas storage levels are now 12.8 percent greater than a year ago and 4.5 percent greater than the five-year average. The amount now in storage is equal to the record storage level seen at this time in 2012, according to the EIA.

Henry Hub gas spot prices dropped 17 cents in Thursday-to-Thursday trading, ending at $2.35/MMBtu Oct. 22. Average prices at Western hubs fell between 13 and 37 cents. Southern California Border lost the most, down 37 cents to $2.29/MMBtu.

Values remained below the $2.35 Henry Hub benchmark at all Western hubs as of Oct. 22, save for PG&E CityGate (see table).

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"Forecasts for warmer-than-normal weather in the coming weeks have traders expecting that storage levels will continue to increase longer than normal this year, pushing the already oversupplied market into a deeper glut," noted Enerfax, which is forecasting an addition of between 70 and 80 Bcf to be reported next week. Without colder weather to spark heating demand, "that is going to limit any short-term gains."

Western peak power prices were jumbled in the Oct. 16 to Oct. 23 trading period. While Mid-Columbia gained $3.20 to $24.10/MWh, the price was less than its $24.45/MWh off-peak price. The off-peak price gain was almost $5 compared to the previous Friday.

South of Path 15 daytime power posted the greatest loss, down $2.65 to $33.55/MWh. Peak values ranged from an average of $24.10/MWh at Mid`Columbia to $33.55/MWh at SP15.

Nighttime power prices fared similarly, with Pacific Northwest hubs posting gains of roughly $3 to $5. Palo Verde values shed $2.10 in trading to $21.50/MWh. Prices ranged from $21.50/MWh at Palo Verde to $28.20/MWh at SP15.

Seattle and Portland can expect higher-than-normal temperatures the week of Oct. 26, while moisture from Hurricane Olaf may bring rain to the West Coast, including the San Francisco area and California Central Coast, by Oct. 28.

Electricity demand peaked on the Cal-ISO grid at 35,530 MW on Oct. 21, which should be the week's high. Total renewables production on the Cal-ISO grid hit 8,450 MW Oct. 19. Total solar production reached 5,822 MW Oct. 22 [Linda 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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