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AM Power Report: Dailies could favor upside amid supportive fundamentals


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AM Power Report: Dailies could favor upside amid supportive fundamentals

Power values for next-day delivery could rise Tuesday, Dec. 13, as expectations for elevated demand in much of the country at midweek combine with fresh gains at the natural gas futures arena.

Losing nearly 20 cents in the prior session, front-month January 2017 natural gas futures were easing early Tuesday ahead of the opening bell. At last look, the contract was down another 1.4 cents to $3.493/MMBtu, as more moderate weather forecasts are expected to keep demand in check and could limit the amount of natural gas pulled from storage in the near term.

In line with the recent tumble in futures, day-ahead natural gas prices are likely to dip lower in most cases Tuesday, absent any regional weather-side support.

On the demand side, most grid operators anticipate stronger load at midweek.

In the Northeast, demand in New England is poised to peak at 17,870 MW on Tuesday and 18,000 MW on Wednesday, while load in New York is called to reach 20,958 MW on Tuesday and 21,292 MW in the middle of the business week. In the Mid-Atlantic, the PJM Interconnection sees demand in the PJM Western region cresting at 59,175 MW on Tuesday and 61,581 MW on Wednesday, while load in PJM Mid-Atlantic is projected to hit highs at 37,993 MW on Tuesday and 38,975 MW on Wednesday.

In the Midwest, PJM AEP region load could reach highs at 17,859 MW on Tuesday and 18,944 MW on Wednesday, while PJM ComEd demand could top out at 14,526 MW on Tuesday and 14,897 MW at midweek.

In the South, load in ERCOT is forecast to see highs at 40,116 MW on Tuesday and 40,712 MW on Wednesday. In the West, CAISO demand should near 30,580 MW on Tuesday and 30,383 MW on Wednesday, running against the dominant uptrend.

In forward trade, the price of power for January 2017 delivery had a weak showing overall at the start of the new workweek, in tandem with front-month natural gas futures that notched significant losses on the session to ultimately suggest cheaper fueling costs.

In the East, power parcels for January 2017 unraveled almost $13 in deals carried out above $77 at NEPOOL-Mass and shed about $4 in trades done atop $55 at PJM West, while power products for delivery in February 2017 were transacted in the low $80s in New England and in the low $50s at PJM West.

In the Midwest, price action for month-ahead power gave back more than $2 at the PJM markets to average near $49 at the AD hub and at roughly $46 at the Northern Illinois hub, while MISO Indiana prompt-month pricing deflated by almost $4 to an index approaching equal value with PJM Northern Illinois January 2017 activity. Power values for February 2017 spanned the low $40s overall.

In the South, losses of more than $2 at the ERCOT markets steered power transactions for January 2017 to indexes ranging from $31 to $33, while regional trading action for February 2017 power was similarly spread in the low $30s.

In the West, California saw front-month power prices falter by more than $2 to average at about $39 at North Path-15 and near $38 at South Path-15, as month-ahead power values eased by roughly 70 cents at Mid-Columbia and slid by more than $2 at Palo Verde to indexes above $30. Power pricing for February 2017 spanned the mid- to high $30s in California and the high $20s elsewhere in the region.

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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 and natural gas index prices, as well as forwards and futures, visit our Commodities Pages.