Western Price Survey
December 23, 2016
Colder weather across the United States pushed natural gas withdrawals to record levels.
Working natural gas in storage was 3,597 Bcf as of Dec. 16, according to U.S. Energy Information Administration estimates. This is a net decrease of 209 Bcf compared to the previous week. It is also the largest withdrawal during the month of December recorded in the EIA’s Weekly Natural Gas Storage Report, which dates to 1994.
“The substantial storage draw is related to a combination of cold weather, increased electric-sector capacity for natural gas, reduced natural gas production relative to last year, and increased natural gas export volumes,” the EIA said.
Storage levels are now 5.9 percent less than a year ago and 2.2 percent greater than the five-year average.
Nationally, natural gas consumption increased 11 percent compared with the previous report week, as use of gas for power generation increased 10 percent week over week, according to the EIA.
Southern California Gas Co. dispatches of natural gas were between 3.3 and 3.4 Bcf during the cold snap, according to Energy GPS. The situation was such that the utility posted a “curtailment watch” starting Dec. 18.
Total natural gas consumption in the U.S. during the first three weeks of December has been 92 Bcf/day, on average. This is 21 percent greater than the same period last year and 17 percent greater than the five-year average.
Henry Hub gas spot values added 3 cents between Dec. 15 and Dec. 22, ending at $3.58/MMBtu.
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Most Western natural gas hubs saw values move lower by between 2 cents and as much as 64 cents in trading. Sumas natural gas posted the greatest loss, down 64 cents to $3.61/MMBtu. In contrast, PG&E CityGate added 8 cents in trading to end at $3.76/MMBtu.
Meanwhile, Western peak power prices shed between $1.50 and $3.55 between Dec. 16 and Dec. 22. No trades were posted Dec. 23; trades posted Dec. 22 were earmarked for Dec. 27 delivery. Prices ranged from $25.80/MWh at Mid-Columbia to $36/MWh at South of Path 15.
Average nighttime power prices eroded between 20 cents and $1.15 in the abbreviated trading period. SP15 saw the greatest loss, down $1.15 to end at $31.50/MWh,
Demand peaked on the CAISO grid at 30,861 MW Dec. 19, which should be the week’s high. Total renewable-energy generation on the grid peaked at 9,938 MW Dec. 18.
What’s ahead: Colder weather is expected in inland portions of Northern California from Christmas through at least Dec. 28. Some higher elevations in the Bay Area may see a dusting of snow. There is a slight possibility of rain in Southern California on the 29th [Linda Dailey Paulson].
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