Western Price Survey
November 3, 2017
Western power prices got a lift at week’s end, most likely attributable to the expectation that the weekend’s cold and wet weather would linger into the week of Nov. 6.
Daytime power prices added between $10.75 and as much as $26.20 in Friday-to-Friday trading. Much of that value was gained between Thursday and Friday, when hubs added as much as $17.65. Prices by Nov. 3 ranged from $38.15/MWh at Palo Verde to $56.40/MWh at South of Path 15.
Power demand on the California Independent System Operator grid reached 28,858 MW on Oct. 30, which was the high for the calendar week. Northwest Power Pool demand reached 55,778 MW on Nov. 2.
Working natural gas in storage was 3,775 Bcf as of Oct. 27, according to U.S. Energy Information Administration estimates, representing a net increase of 65 Bcf compared with the previous week. This is 4.6 percent less than a year ago and 1.1 percent below the five-year average.
Despite a 14 percent increase in natural gas demand week over week, the amount of natural gas used for power generation decreased 8 percent. Residential and commercial-sector natural gas use jumped 73 percent based on temperature-driven increased heating needs.
Should additions keep pace with the five-year average, working gas stocks could reach 3,782 Bcf by the end of the refill season.
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“This level would be the lowest level reported at the end of October since 2014, when working gas stocks totaled 3,564 Bcf,” noted the EIA. If additions do continue, EIA said, “stocks could reach 3,831 Bcf by Nov. 10 if net injections match the five-year average over the next two weeks.”
Henry Hub gas spot values dropped 18 cents to $2.71/MMBtu between Oct. 26 and Nov. 2.
In Thursday-to-Thursday trading, Western natural gas prices generally fell between 5 and 39 cents. Alberta natural gas proved the exception, adding 92 cents to reach $2.05/MMBtu.
In October, average natural gas prices were lower compared with prices in October 2016 (see “Price Trends,” next page). The average high price at Henry Hub was $3.01/MMBtu, 20 cents less than in 2016.
Western hub prices in October were also roughly 20 cents lower year over year, save for Southern California Border natural gas, which was 95 cents higher. To place this in perspective, natural gas prices at Western hubs in October 2016 were 39 cents to 58 cents/MMBtu higher than in the same month in 2015.
Average Western power prices in October 2017 were between $10.25 and as much as $77.40 greater than the average prices recorded in 2016, thanks to extreme heat across the region.
Archives of the Western Price Survey for the past year are also available online.
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