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Western Price Survey

Week's End Edition
December 21, 2012
Western Natural Gas Prices Rebound, But For How Long?

Western natural gas prices moved higher on a storage withdrawal but prices may have difficulty climbing further if weather remains warmer than normal.

Working gas in storage reached 3,724 Bcf as of Dec. 14, according to U.S. Energy Information Administration estimates, a net decrease of 82 Bcf from the previous week. Storage levels are now 1.8 percent greater than a year ago and 10.2 percent above the five-year average.

Natural gas values responded to the withdrawal over the Dec.14 - 21 trading period. Henry Hub natural gas values jumped 28 cents since last Friday to $3.42/MMBtu. Some Western prices ended even higher, with SoCal Border gas for instance jumping 30 cents to $3.64/MMBtu.

"Despite the bullish storage number, prices have struggled to breach the $3.50-level as of [the morning of Dec. 20], as the weather forecast remains quite mild compared to normal," observed Barclays analysts in their weekly commodities report. "We believe a 5 percent warmer-than-normal winter could pressure gas prices back to $3/MMBtu."

Conditions are similar to about this time last year, when energy traders were waiting for colder weather in the East to bid up natural gas values.

"Since Thanksgiving, the forecasts have promised cold, but it's never developed," noted Enerfax in its Dec. 21 report. "The latest projections for colder temperatures in the Midwest and East in the final days of December and early January may have less impact on demand than expected, because many industrial plants and commercial buildings close for the holidays."

Western peak power prices tended to rise slightly in the Northwest but fell in California. Here's how average peak values fared over the Dec. 14 - 21 trading period:

  • Mid-Columbia: Gained $2.70 to $27.15/MWh.
  • California-Oregon Border: Up about $2.25 to roughly $30.05/MWh.
  • North of Path 15: Down $2.75 to 35.25/MWh.
  • Palo Verde: Shed about $1.50 to $28.05/MWh.
  • South of Path 15: Dropped about $5.05 to $36.55/MWh.

Regional off-peak electricity prices gained between $1.50 and roughly $3.50/MWh since last Friday. Average prices for off-peak electricity in the West today ranged from $26.20/MWh at Mid C to $31.50/MWh at SP 15.

Peak demand on the Cal-ISO grid reached 32,786 MW Wednesday, which was the week's high use. Northwest Power Pool demand peaked at 61,299 MW Tuesday.

What's Ahead: Cool weather and showers are expected off and on across the West Coast the week of Dec. 24. The National Weather Service forecasts an increased probability of below-normal temperatures from Washington into Southern California, from Dec. 26, 2012 through Jan. 3, 2013 [Linda Dailey Paulson].

Editor's Note: The Western Price Survey will not be published the week of December 24th. Energy NewsData's offices are closed that week. Publication will resume January 2, 2013.

Western Electricity Prices
Week's End: December 17 - 21, 2012
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 20.41-187 17.63-38.72
Mid-Columbia 26.50-30 19-27
COB 29-32.50 22-29
NP 15* 35.25-38 27.50-31
SP 15* 36-39.75 26.50-31.50
Palo Verde 27.50-31 24.75-27

* 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.

Please contact with questions or comments about this site.

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

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