Western Price Survey
November 4, 2016
Storms throughout October brought needed rains to California. The Northern Sierra eight-station index was roughly 400 percent of normal at the end of October, making it the second-wettest October since 1920; the highest state rainfall was recorded in October 1962, according to Doug Carlson, spokesperson for the California Department of Water Resources.
Most reservoirs “are still below their historical averages for today’s date,” Carlson said, “but they’re starting to increase their storage earlier than normal. I’m told that the ground no longer is as dry as it has been, so runoff has been increasing.”
In natural gas markets, weak demand and continued injections are suppressing prices, which dropped markedly in trading this week.
Without cold weather to spark demand, inventories remain high, noted Enerfax. Temperatures are forecast to be warmer than normal through Nov. 18, which is expected to continue dragging on prices.
Henry Hub gas spot values tumbled 32 cents in Thursday-to-Thursday trading, ending at $2.37/MMBtu on Nov. 3. Western natural gas values, meanwhile, dropped between 24 cents and as much as 60 cents in trading. PG&E CityGate lost the most, ending at $2.54/MMBtu.
Working natural gas in storage was 3,963 Bcf as of Oct. 28, according to U.S. Energy Information Administration estimates. This is a net increase of 54 Bcf compared to the previous week. Storage levels are now 1.2 percent greater than a year ago and 4.6 percent greater than the five-year average.
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Western peak power prices moved lower between Oct. 28 and Nov. 4. California-Oregon Border posted the greatest loss, down $4.40 to $23/MWh in Friday-to-Friday trading.
Average nighttime power prices varied. Pacific Northwest hubs added roughly $1.85 in trading, while South of Path 15 lost $5.95 to end at $25.56/MWh.
Demand peaked on the CAISO grid at 29,904 MW Nov. 3; the week’s high was expected Nov. 4, with demand forecast to reach 30,214 MW.
In October, average natural gas prices were higher compared to October 2015’s (see “Price Trends,” next page). The average high price at Henry Hub was $3.24/MMBtu, about 72 cents higher than in 2015. Gas prices at Western hubs in October 2016 were 39 cents to 58 cents/MMBtu higher than in the same month last year.
In contrast, average October Western power prices varied versus 2015 prices. Pacific Northwest prices were up nominally but other hubs had average prices close to last October’s range [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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