Ahead of the official start of winter at 5:44 a.m. ET on Dec. 21, next-day power prices moved mixed Tuesday, Dec. 20, amid various weather patterns across the country, slipping natural gas prices and declining liquidity ahead of the Christmas holiday.
Having already lost more than 40 cents in the last seven sessions, January 2017 natural gas futures continued to collapse Tuesday, dropping 12.9 cents to settle at $3.263/MMBtu in its sixth day of losses in the past seven sessions. The front-month contract is now down a collective 48.3 cents, or 12.9%, since Dec. 9.
Amid the ongoing softness for futures, day-ahead gas markets also leaked lower Tuesday.
On the demand side, load outlooks for midweek are pointed lower as milder weather alleviates heating demand and commercial and industrial demand weakens ahead of the year-end holidays.
Stormy outlook support Northwest dailies in revised trade
Power prices in parts of the western U.S., especially in the Northwest, ran higher Tuesday, defying a declining next-day load outlook, as a blast of colder weather is set to hit the region.
Deals in the West covered both Dec. 21 and Dec. 22 as traders covered positions ahead of the Christmas holiday.
Action in the Northwest was pegged in the low $30s at both Mid-Columbia and COB, as the former ran at a discount of less than $1 to the latter. According to AccuWeather.com, storms will bring up to two feet of snow to the "high country of the Sierra Nevada and southern Cascades" through Dec. 24 before spreading snow and wind to the eastern slopes of the Rockies and northern Plains from Denver to Minneapolis through Dec. 25.
In California, where CAISO peak load is called to ease about 800 MW to below 30,000 MW by Wednesday, South Path-15 saw power values ease about $1 to the mid-$30s. In the Southwest, Palo Verde shed less than $1 to trade in the high $20s, or about $2 below Mead, which added close to $1 on the day.
New England dailies correct lower amid milder weather
After a frigid start to the workweek, the onset of milder weather in the Northeast helped knock power prices off their perch. In New England, the Mass hub saw dailies fall more than $30 on the day to an average just above $50. Having already shed value in previous session, PJM also pushed lower but with gains kept to about $8 with an index in the low $30s.
Milder weather also helped pressure day-ahead markets as Mass hub slumped almost $15 to an average DAM of $59.71. In New York, Zone J averaged $60.23, Zone G was pegged at $51.62 and Zone A saw DAMs average $27.27.
Demand in New England is expected to crest at 18,350 MW on Wednesday, off about 650 MW on the day, while load in New York is projected to reach 21,154 MW at midweek, off close to 300 MW. Farther south, PJM Western region load is seen peaking at 58,836 MW on Wednesday, plunging more than 4,200 MW day on day, while PJM Mid-Atlantic demand should peak near 39,517 MW on Wednesday, off about 2,300 MW on the day.
ERCOT day-ahead markets slip with load outlook
ERCOT markets remained under pressure Tuesday as a recent blast of cold weather continues to moderate, which is cutting back heating demand.
Most day-ahead markets were close to $5 lower day on day to averages of $26.53 at ERCOT South, $25.80 at ERCOT Houston, $25.10 at ERCOT West and $25.04 at ERCOT North.
ERCOT demand could touch a high near 46,612 MW on Wednesday, down more than 4,000 MW on the day. ERCOT meteorologist Chris Coleman said that temperatures through Dec. 21 should rise to near normal, but cooler air will return later in the week "behind yet another cold front."
Elsewhere in the Southeast, Into Southern trades were pegged near $30, off almost $10 from prior-day assessments.
Midwest markets pressure by load forecast, gas prices
Midwest power markets were under pressure Tuesday in thin trading, as both load forecasts and natural gas markets pointed lower.
Demand in the PJM AEP region is called to reach 19,229 MW on Wednesday, off 1,400 MW on the day, while load in PJM ComEd is forecast to peak at 13,734 MW at midweek, off more than 500 MW on the day.
In spot gas trade, Chicago dropped more than 20 cents to an average below $3.35/MMBtu, while Demarc dropped more than 30 cents to an average near $3.25/MMBtu.
Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power, natural gas and coal index prices, as well as forwards and futures, visit our Commodities Pages.