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Western Price Survey

Week's End Edition
November 18, 2011
Natural Gas Prices Remain Soft

Natural gas storage additions coupled with low demand further depressed energy prices this week.

Working gas in storage was 3,859 Bcf as of Nov. 11, according to U.S. Energy Information Administration estimates, a net increase of 19 Bcf from the previous week. Stocks were 14 Bcf more than last year at this time and 224 Bcf above the five-year average of 3,626 Bcf. The West was the only region that withdrew from stocks, but storage amounts remain robust.

In the Friday-to-Friday trading period, Nov. 11 to Nov. 18, SoCal Border gas dropped 20 cents to $3.37/MMBtu. Ruby-Malin gas lost 13 cents, finishing at $3.40/MMBtu, while PG&E CityGate dropped 12 cents, to end at $3.78.

For comparison, Henry Hub traded for an average of $3.01/MMBtu Friday.

Analysts expect natural gas prices to remain low through November, given high storage levels and mild weather. Typically, withdrawals from storage begin in mid-November; however, mild weather and less heating demand means more natural gas supply. Enerfax states that colder-than-normal weather is needed in the Midwest, Northeast and Texas to push natural gas prices higher "or at least pause before pushing lower. Prices are so oversold that almost anything could trigger short-covering."

In electricity markets, peak demand on the Cal-ISO grid Tuesday was 29,897 MW, while Pacific Northwest Power Pool peak demand reached the week's high of 56,517 MW Wednesday. For the Thursday-Friday trading period running Nov. 10-18, here's how average peak-power prices fared:

  • Mid-C: Fell almost $2.70 to $36.05/MWh.
  • California-Oregon Border: Lost about $2.50 to roughly $37.20/MWh.
  • NP15: Ended Tuesday at $34.50/MWh, down about $5.60 compared to Nov. 8.
  • SP15: Down $2.25 to almost $32.45/MWh.
  • Palo Verde: Fell $2.45 to $33.35/MWh.

Peak and off-peak prices in the Northwest jumped by about $10/MWh on Thursday, Nov. 17, as loads increased, cold weather was expected, and the Columbia Generating Station was down for a planned outage, said Michael Hansen, Bonneville Power Administration spokesman. Prices retreated by Friday, however.

Over the trading period, nighttime average prices at Northwestern hubs rose by as much as $6.50/MWh, with California hubs down roughly a dollar. Average off-peak prices by Friday ranged from about $25 to around $33.95/MWh (see chart).

What's ahead: A series of strong frontal systems influence West Coast weather throughout the week. The first front reaches Seattle Monday, Nov. 21. Heavy rain is expected Tuesday or Wednesday in Washington, with more than 10 inches of rain predicted in the Olympic range by late Wednesday and three to five inches in the Northern Cascades during that same period. Portland temperatures should be in the 40s with unsettled, damp weather into Thursday.

The San Francisco area should be in the high 50s early in the week, warming to hover around the 60-degree mark by Wednesday. Rains may reach central California Wednesday or Thursday, bringing gusty conditions with them. The same system may bring precipitation to San Francisco. The Los Angeles area should be dry and warm early in the week, with a possibility of rain by Thursday [Linda Dailey Paulson].

Western Electricity Prices
Week's End: 14 - 18, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 28.75-924.85 15.22-40.71
Mid-Columbia 30.25-45 23.25-36
COB 32.25-44 24.50-34
NP 15* 34.50-34.50 24.25-25.25
SP 15* 32-34 22.50-27
Palo Verde 30.75-33.50 21.75-25.50

* 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.

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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