Western Price Survey
Week's End Edition
Western power prices ended the week mixed, with California hubs up several dollars in the Oct. 19 to Oct. 26 trading period, while Pacific Northwest hubs lost value.
Here's how average values for peak power in the West fared since last Friday:
Off-peak prices were also mixed in Friday-to-Friday trading. Pacific Northwest hubs lost less than a dollar, while California hubs gained as much as $3.10. Off-peak prices Friday ranged from about $29.45/MWh at Mid-C to $36.25/MWh at SP15.
Working gas in storage reached 3,843 Bcf as of Friday, Oct. 19, according to U.S. Energy Information Administration estimates, a net increase of 67 Bcf from the previous week. Storage levels are now 4.1 percent higher than a year ago and 7 percent above the five-year average.
Natural gas storage is reaching near-record levels. The EIA, in its Short-Term Energy Outlook released Oct. 10, stated it expects inventory levels at the end of October 2012 to set a record high of 3,903 Bcf.
Henry Hub spot natural gas lost 5 cents since last Friday, trading Oct. 26 at $3.38/MMBtu. Western spot prices also moved lower, with PG&E CityGate dropping 29 cents to $3.86 and Southern California Border gas losing 13 cents to $3.46.
Traders are concerned about Hurricane Sandy, which may make landfall in the New Jersey-New York area on Oct. 30. "Analysts said the storm could cause power outages that cut gas demand, while supplies from inland fields would be unaffected, raising potential for further big increases in storage levels in the coming weeks," Enerfax stated.
In a weekly report, Barclays analysts stated that natural gas prices would not reach the winter 2011-2012 average price of $2.86/MMbtu without record-setting warm weather. The firm's winter-weather analysis indicates that a winter that is 10 percent colder than normal would place end-of-March 2013 storage at a similar level to that of March 2011, "indicating that prices could average above $4 but not significantly beyond that," the report stated. Warmer-than-normal weather, however, would put storage on a par with March 2012, "indicating to us that prices would need to average less than $3."
Peak demand on the Cal-ISO grid reached 30,257 MW Thursday, Oct. 25, according to the grid operator. Northwest Power Pool demand reached 52,846 MW Monday, Oct. 22.
What's ahead: Rain is expected throughout the Pacific Northwest into Thursday, with highs in the 50s forecast for both Seattle and Portland. San Francisco expects partly sunny skies Monday and Tuesday; however, rain is possible in the area late Tuesday through Wednesday evening. Sunny weather should return to the Bay Area Thursday, with a daytime high around 67°F. Meanwhile, Los Angeles anticipates partly sunny skies with temperatures moving into the mid-70s starting Wednesday [Linda Dailey Paulson].
* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.
Archives of the Western Price Survey for the past year are also available online.
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