Spot natural gas prices in California rose this week after averaging flat last week amid milder weather and ongoing wildfires that reduced demand for electricity.
SoCal Citygates prices — a key indicator for the value of gas in southern California — have averaged $2.80/mmBtu so far this week, 8.5pc higher than last week's average of $2.58/mmBtu. The average last week was only 1¢/mmBtu below the previous week and 33¢/mmBtu lower than at the same time last year.
Electricity demand in the Pacific southwest fell by 5pc last week to 5.7TWh, according to the Edison Electric Institute. Pacific northwest power output was flat last week at 2.4TWh.
The 2020 wildfire season has added volatility to spot natural gas prices in California after what was an already fluctuating summer demand season. Spot prices for SoCal Citygates peaked on 17 August at $13.25/mmBtu, the highest since February as a heat wave pushed demand for gas-fired power. The index hit a bottom of $1.33/mmBtu just a month prior, the lowest in a year.
A system of low pressure moved through the Pacific last week, which moved wildfire smoke from Oregon, Washington and California away from densely populated areas and towards the northeast, according to the National Weather Service (NWS). But the NWS has issued additional wildfire warnings and watches for central and northern California through the weekend. Large amounts of wildfire smoke can reflect solar radiation, lowering temperatures.
