Western Price Survey
October 28, 2016
Spot prices for both Western natural gas and power fell this week as the market prepared for the end of October—which traditionally marks the end of additions to natural gas storage.
It appears likely that national natural gas storage levels may start the winter at record highs.
Working natural gas in storage was 3,909 Bcf as of Oct. 21, according to U.S. Energy Information Administration estimates. This is a net increase of 73 Bcf compared to the previous week. Storage levels are now 1.3 percent greater than a year ago and 4.9 percent greater than the five-year average.
“If net injections match the five-year average for the remainder of the refill season, working gas stocks will total 3,988 Bcf on October 31,” notes the EIA. “This storage level exceeds the all-time end-of-refill-season high of 3,929 Bcf in 2012.”
Total natural gas consumption was up 5 percent versus the previous report week; however, natural gas used for power generation was down 9 percent week over week, according to the EIA.
Henry Hub gas spot values fell 40 cents in Thursday-to-Thursday trading, ending at $2.69/MMBtu Oct. 27.
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Western natural gas values dropped between 10 and as much as 36 cents in trading. Both El Paso-Permian and Sumas natural gas fell 36 cents by Oct. 27. PG&E CityGate managed to remain above the $3 mark at $3.14/MMBtu after shedding a dime.
Likewise, most Western peak power prices moved lower between Oct. 21 and Oct. 28. Palo Verde posted the greatest loss, down $3.25 to $23.25/MWh in the Friday-to-Friday trading period. Mid-Columbia proved the exception, unchanged in trading at $21.35/MWh.
Average nighttime power prices also fell. Pacific Northwest hubs posted the greatest loss, down roughly $10 in trading, while other hubs dropped between $2.70 and $2.85, on average. Nighttime power prices Oct. 28 ranged from $11.20/MWh at Mid-C to $28.50/MWh at SP15.
Demand peaked on the CAISO grid at 29,618 MW Oct. 26, which should be the week’s high. Solar generation reached 7,841 MW Oct. 21, as did thermal generation, which peaked at 16,945 MW [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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