Western Price Survey
November 4, 2005
A significant, rapid drop in the cost of natural gas this week translated into a quick tumble in the spot electricity markets as well. Trading hubs throughout the West reported average losses of about 20 mills between the Monday and Tuesday bidding sessions. Prices clawed themselves up by a few mills on Wednesday and Thursday, but another swoon in gas values pushed end-of-week power costs even lower.
The price of peak-time electricity in Northern California's markets, where supply was plentiful and demand low, ranged from a high of 100.25 mills/KWh on Monday to a low of 64 mills/KWh at the end of the week. Off-peak power at the NP15 hub topped out at 76.25 mills/KWh at the beginning of the week before fading to between 53.50 mills and 56 mills/KWh during the Tuesday and Wednesday trading sessions. By the end of the week the spread had widened to between 54.50 mills and 60.50 mills/KWh.
South of Path 15 trading activity did little to distinguish itself from NP15 values. Monday peak-time power costs moved between 89.75 mills and 99.50 mills/KWh. The drop in the price of natural gas drove the price of power down to 68 mills/KWh on Tuesday before a gain of around 10 mills the following day helped to counter the loss. The nadir for the week was hit on Friday, when peak-time power trades were closed for 63.15 mills/KWh. Low-demand power in Southern California's spot market peaked at 76 mills/KWh on Monday, but generally spent the week hovering around the 60 mills/KWh mark.
Northwest peak-time power attracted between 79.50 mills and 81 mills/KWh at the Mid-Columbia hub on Monday. Power scheduled for midweek delivery at Mid-C drew as much as 75.50 mills/KWh. The drop in gas costs dropped the price down to between 56 mills and 65.50 mills/KWh on Friday for next-week deliveries. Trades of nighttime power were made for between 51 mills and 70 mills/KWh in the first half of the week, but stayed mostly in the fifties on Thursday and Friday.
The price of daytime power at the Southwest hub at Palo Verde ranged from a high of 82.50 mills/KWh on Monday to a low of 53.50 mills/KWh recorded in Friday's trading session. Off-peak power at Palo Verde bottomed out at 42 mills/KWh on Tuesday before regaining half a dozen mills in late-week trading [Shauna O'Donnell].
Spot Gas Prices Tank
Generally mild weather throughout the country and a few weeks' worth of healthy injections of natural gas into underground storage drew the price of the fuel down this week. Even the unimpressive 29 Bcf storage injection figure announced by the Energy Information Administration and a rally in the price of crude oil could not reverse the downward trend in the spot market.
At the Permian producing basin, gas costs moved from a high of $9.10/MMBtu on Monday down to between $6.30 and $7.30/MMBtu the following day. By Friday the price slipped down to between $5.85 and $6.75/MMBtu. San Juan Basin gas went for a low of $5.80/MMBtu that day.
Gas entering California at the Southern California border receipt point at Topock traded for a high of $9.72/MMBtu at the start of the week. Slipping to between $5.80 and $7.26/MMBtu on Tuesday, the price scooted up to $8.05 at midweek. The volatility continued in subsequent trading sessions, with the price hitting $8.40/MMBtu on Thursday before retreating to a range of $5.80 to $6.40/MMBtu on Friday [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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