Western Price Survey
October 25, 2013
Natural gas inventories nationwide reached 3,741 Bcf as of Friday, Oct. 18, according to the U.S. Energy Information Administration, after a storage boost of 87 Bcf from the previous week. With slightly more gas put into storage compared with the same week last year, working gas in storage is now 2.4 percent below where it was a year ago but 2.1 percent above the five-year average.
The EIA issued two gas reports this week -- the report for the week that ended Oct. 11 was not issued as scheduled due to the federal government shutdown.
Working gas in storage reached 3,654 Bcf as of Friday, Oct. 11, according to EIA estimates, a net increase of 77 Bcf from the previous week. Storage levels were 3.1 percent less than a year ago and 1.6 percent greater than the five-year average.
Henry Hub natural gas values lost 4 cents since last Friday, trading Oct. 25 at $3.67/MMBtu. Western hubs generally moved higher in Friday-to-Friday trading, with Malin natural gas adding about 10 cents to $3.82/MMBtu and Southern California Border gas up 3 cents to $3.81/MMBtu. PG&E CityGate proved the exception, trading even at $3.98 Oct. 25.
Analysts say recent inventory additions should push natural gas stocks to more than 3.8 Tcf by the end of the storage season, although cold weather in some of the country may briefly increase demand. For the week that ended Oct. 23, consumption increased 9.4 percent from the previous week, EIA said, citing data from Bentek Energy.
"We believe prices are near the bottom of their range at current levels," noted Barclays analysts.
Higher coal prices may increase natural gas consumption and prices in the near term based on increased demand from the power-generation sector, noted both Enerfax and Barclays.
Meanwhile, average prices for peak power in the West lost value in Friday-to-Friday trading, with Northwestern hubs shedding about $7 (see chart). Average prices Oct. 25 ranged from $34.05/MWh at Palo Verde to $41.70 at SP15.
Hydro generation at the Bonneville Power Administration stayed ahead of demand during the week, despite water power periodically dipping below 4,000 MW. Wind generation, which has been tepid for weeks, struggled to move past 300 MW Oct. 23 and flatlined the rest of the week. Wind-power production in the Cal-ISO area was lackluster, but picked up slightly as the week progressed.
What's ahead: The National Weather Service forecasts an increased probability of above-normal temperatures in Washington between Oct. 30 and Nov. 3, while Oregon, California and Arizona should have seasonally normal temperatures [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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