Western Price Survey
Week's End Edition
In recent years, additions to gas storage have continued into November. This year so far, temperatures across the United States have not been sufficiently cold to trigger substantial withdrawal from natural gas storage.
Working gas in storage reached 3,877 Bcf as of Friday, Nov. 23, according to U.S. Energy Information Administration estimates, a net increase of 4 Bcf from the previous week. Additions were made in the West and producing regions.
Storage levels are now 0.7 percent greater than a year ago and 5.2 percent above the five-year average.
EIA's latest weekly report notes an average 2.3 Bcf/d increase in natural gas burn during the first 28 days of November, compared with the same period last year, to offset nuclear outages.
"California recorded the nation's highest annual increase in average natural gas replacement volumes (0.5 Bcf/d) and new capacity outages (2.2 gigawatts) for November 2012, due to shutdowns at the San Onofre Nuclear Generating Station Units 2 and 3," the agency noted in its Nov. 29 report. SONGS has been off line since the end of January.
Spot prices for Henry Hub natural gas dropped 13 cents since Nov. 21, trading today at $3.46/MMBtu. Among Western hubs, PG&E CityGate rose 9 cents, trading at $3.84/MMBtu, while Malin gas lost 9 cents to $3.46/MMBtu, and Southern California Border values eroded a cent to $3.54/MMBtu.
Barclays analysts, in a Nov. 30 commodities report, said they expect natural gas prices to "stay range bound for the time being, with very little support from weather or any incremental fundamental changes in supply." In addition to a warmer-than-normal December forecast, they note that natural gas production has not slowed appreciably.
Meanwhile, here's how prices for peak power in the West fared since Wednesday, Nov. 21:
Off-peak prices at Northwest hubs lost roughly $5 to $6 in trading between Nov. 21 and Nov. 30, while NP15 and Palo Verde traded nearly even. Off-peak power prices on Friday, Nov. 30, ranged from about $21.75/MWh at Mid-C to almost $29.90/MWh at NP15.
Peak demand on the Cal-ISO grid reached 31,264 MW Nov. 28, which was the week's high, according to the grid operator. Northwest Power Pool demand reached 57,258 MW Nov. 26.
What's ahead: A second series of storms may bring more heavy rain and snow to portions of the West Coast starting Tuesday or Wednesday. An extended forecast calls for an increased probability of near-normal temperatures from Washington to Oregon between Dec. 6 and Dec. 14, extending into Northern California from Dec. 8 through Dec. 14 [Linda Dailey Paulson].
* 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.
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