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Western Price Survey

December 2, 2016
Gas Prices Climb to Two-Year High

Energy prices have soared since Thanksgiving, driven by increasingly cold weather.

Henry Hub gas spot values surged 66 cents since Nov. 22 to reach $3.41/MMBtu on Dec. 1.

Freezing rain is expected across the Pacific Northwest starting Dec. 5. Cooler weather should occur across California, with near-freezing nighttime lows starting Dec. 6 in the Central Valley. Southern California daytime highs are forecast to be as much as 10 degrees lower than seasonal norms Dec. 6 through Dec. 8.

Western natural gas values gained between 31 and as much as 68 cents in the trading period.

“Natural gas prices have been on a tear, surging nearly 30% in the last two weeks to the highest prices in nearly two years,” noted Enerfax in its Dec. 2 report. “After an unusually mild autumn, new forecasts show colder temperatures spreading across most of the country starting next week. That is helping to quell fears that a glut of supply will continue to weigh on prices. The market has been waiting for this.”

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Working natural gas in storage was 3,995 Bcf as of Nov. 25, according to U.S. Energy Information Administration estimates. This is a net decrease of 50 Bcf compared to the previous week. Storage levels are now 0.6 percent greater than a year ago and 6.3 percent greater than the five-year average.

There was no net change in natural gas storage levels reported by the Pacific region during the report week.

Western peak power prices jumped between $12.55 and as much as $16.40 between Nov. 23 and Dec. 2. Most of the upward momentum occurred the week of Nov. 28. Mid-Columbia, for example, gained $16.40 in the extended trading period; it was up $12.20 on average in the calendar week. Average nighttime power prices followed suit.

In November, average natural gas prices were higher than those in November 2015 (see “Price Trends,”). The average high price at Henry Hub was $3.29/MMBtu, which was about $1.10 higher than in 2015. Prices at Western hubs in November 2016 were 74 to 90 cents/MMBtu higher than in the same month last year.

Western power prices varied versus November 2015 prices. Pacific Northwest values were lower by as much as $8.50 MWh on average, but South of Path 15 prices tended to trend higher by as much as $5/MWh [Linda Dailey Paulson].

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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