Wednesday, June 27, 2012
The U.S. California/Southwest and Pacific Northwest natural gas markets are tied closely by common supply basins and interconnected power markets. BENTEK's West Observer reports the supply and demand balance in both of these regions, and the western U.S. as a whole, is becoming tighter in natural gas supply due to a lack of new production.
Meanwhile, higher-than-normal demand and pipeline constraints are keeping regional prices at a premium and will have the potential to continue over the long term. These dynamics are making the West an important area to monitor, especially as opportunities for regional gas-fired generation and natural gas exports to Mexico grow.
BENTEK's West Observer provides enhanced and integrated coverage of the California/Southwest and Pacific Northwest regions and improves power market transparencies. Granular, sub-regional power data and comprehensive natural gas coverage of both regions is included in the West Observer, providing a deeper dive into the relationship between the natural gas and power markets.
Developing market trends that will be featured in BENTEK's new West Observer:
• The western U.S. is facing a tighter supply-demand balance in light of flat production and above-normal demand. These changes are expected to keep regional prices among the highest in the U.S.
• As the outage at the San Onofre Nuclear Generating Station continues, the Southern california market will be tighter, exerting upward pressure on regional prices and creating upside price risk, especially if the summer is hotter than normal.
• Another strong snow runoff season in the Pacific Northwest will continue to provide abundant hydropower, offsetting incremental natural gas power generation this summer. However, the duration of these conditions will be shorter, limiting downside price pressure to less than what was seen in 2011.
• Storage expansion projects totaling up to 26 Bcf have come online in Northern California so far this year, impacting seasonal dynamics- as well as the relationship between PG&E and SoCal.
• The potential for growth of regional gas-fired generation and natural gas exports to Mexico will significantly impact the outlook for western U.S. supply, demand and pricing.
ALSO AVAILABLE FROM BENTEK:
BENTEK's full line of Observers provides regional coverage of natural gas supply and demand dynamics, price differentials and inflow/outflow analysis for the U.S. and Canada.
BENTEK's Cell Model database balances supply, demand and storage on a region-by-region basis and provides new visibility into the movement of natural gas in the U.S.
To learn more, please contact your BENTEK sales representative or call BENTEK Sales at 1-888-251-1264.