Western Price Survey
Week's End Edition
Off-peak power prices this week got a bit of a boost for next-Monday deliveries, as a storm blowing across California this weekend is expected to bring rain to the coast and snow to the Sierra Nevada.
At the start of the week, the West warmed after dealing with an early December cold front. Midweek power values lost between 6 mills and 8 mills/kWh from Monday prices.
On Thursday, however, the U.S. Department of Energy reported a withdrawal of natural gas in the West for the cold week ending Dec. 1. The weather forecast also called for rain swells to move from the Pacific onto the California shore Friday.
The weekend forecast indicates highs in the upper 60s and lows in the upper 40s along much of the California coast--not exactly conditions for a space-heater frenzy, which would drive up off-peak power. Then again, a storm is coming, and gas stocks had been withdrawn the previous week.
Off-peak prices in California seemed most affected by the storm news in Friday trading. Peak power at South of Path 15 traded at around 74 mills/kWh Monday and lost about 8 mills/kWh the next few days, settling Friday at about 68 mills/kWh. Off-peak power traded between 52 mills and 57 mills/kWh Monday and remained at around 50 mills/kWh through Thursday, before climbing to near 60 mills/kWh the next day.
North of Path 15 daytime power, at a high of 74 mills/kWh Monday, steadily lost ground and was at about 68 mills/kWh Friday. Off-peak power was trading at around 58 mills/kWh Friday after remaining at 50 mills/kWh most of the week.
High-demand power at Palo Verde, at a bit above 60 mills/kWh Monday, traded for about 57 mills/kWh most of the week, then seemed to gain a few mills for next-Monday deliveries. Values for off-peak power, which traded between 43 mills and 44 mills/kWh midweek, gained nearly 10 mills/kWh for next-Monday deliveries.
California-Oregon border peak power, at 70 mills/kWh Monday, dropped to about 65 mills/kWh the next day and pretty much stayed there for the trading week. Nighttime power, which went for 59 mills/kWh Monday, fell to about 54 mills/kWh midweek, then settled tightly at 58 mills/kWh in Friday trading.
Peak power in the Mid-Columbia region, at about 67 mills/kWh Monday, remained very close to 61 mills/kWh most of the week. Off-peak power crossed the Friday finish line at 57 mills/kWh, after starting the week at 58 mills/kWh and dropping to a low of 51 mills/kWh [Chris Raphael].
Natural Gas Goes on Seesaw Ride on EIA Storage Numbers
Values for natural gas in the California region plummeted over 40 cents/MMBtu on Tuesday and Wednesday, gained about 20 cents on Thursday, then lost about half that for weekend deliveries.
On Thursday the U.S. Energy Information Administration reported that Eastern states gained 10 Bcf of gas in storage for the week ending Dec. 1. Traders saw the news as positive, and gas futures on the New York Mercantile Exchange for January deliveries lost 56 cents to settle at $7.61/MMBtu in Thursday trading.
The West, however, was a different story, as the region took out 21 Bcf. Stocks are still 22 Bcf above last year's amounts, and 11.1 percent above the five-year average.
Natural gas tended to trade at the highest values Monday, then lost 15 cents/MMBtu the next two days. On Thursday and Friday, news of the storage withdrawal, the impending storm, and short-covering took prices on a wild ride. Permian Basin gas, at about $6.70/MMBtu midweek, was more volatile Thursday and traded between $6.63 and $7.15/MMBtu. On Friday prices dropped, and the spread was between $6.51 and $6.79/MMBtu.
Southern California border natural gas also rode the commodity coaster this week. Prices there were about $6.90/MMBtu Wednesday, then climbed up to between $7.10 and $7.25/MMBtu the next day, before losing about 8 cents for weekend deliveries [C. R.].
Archives of the Western Price Survey for the past year are also available online.
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