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AM Power Report: Dailies could retreat amid dearth of supportive fundamentals

Next-day power values could unwind Thursday, Feb. 22, as mostly softer demand projections for the close of the workweek conspire with renewed losses in natural gas futures.

Rising 4.3 cents in the prior trading day, NYMEX front-month March natural gas futures were aimed lower early Thursday. At 6:35 am. ET, the contract was trading down 2.3 cents at $2.636/MMBtu ahead of the midmorning release of weekly inventory data.

The report to be issued by the U.S. Energy Information Administration is expected to show a gas storage withdrawal of 116 Bcf for the week ended Feb. 16. This will compare to a 92-Bcf year-ago pull and the 145-Bcf five-year-average withdrawal.

On the demand side, outlooks suggest diminished load in much of the country at the close of the workweek, when business-related demand typically wanes approaching the weekend break.

In the Northeast, demand in New England could crest at 16,400 MW on Thursday and 15,940 MW on Friday, while load in New York could top out at 19,511 MW on Thursday and 19,061 MW at the end of the workweek. In the Mid-Atlantic, PJM Western region demand could see highs at 51,746 MW on Thursday and 49,363 MW on Friday, while PJM Mid-Atlantic load could reach highs at 35,972 MW on Thursday and 34,048 MW on Friday.

In the Midwest, demand in the PJM AEP region should near 15,799 MW on Thursday and 15,471 MW on Friday, while load in PJM ComEd is forecast to peak at 12,633 MW on Thursday and 11,925 MW on Friday.

In the South, Texas demand is poised to touch a high near 46,498 MW on Thursday and 41,809 MW at the close of the business week.

In the West, demand in California is called to reach 29,650 MW on Thursday and 27.835 MW on Friday, which should pressure power dailies in the region Thursday, when the offering is typically altered to feature two-day, partly weekend products for Friday-Saturday delivery.

At the term markets, the power offering for March continued to add value across the board Feb. 21, in tandem with front-month natural gas futures that extended higher on the session to ultimately drive an ongoing uptick in fueling costs.

In the East, price action for March power delivery was lifted by about $2 to the low $40s in New England and bolstered by 45 cents to the low to mid-$30s at PJM West. Along the forward curve, power prices for April were spotted in the low to high $30s at both hubs.

In the Midwest, prompt-month power was assessed in the high $20s to the low $30s in transactions 30 cents higher day on day at PJM AD and between $1 to $2 stronger at both PJM Northern Illinois and MISO Indiana. April power parcels were quoted in the low $30s overall.

In the South, gains of about 50 cents to nearly 70 cents at the ERCOT markets steered pricing for March power to the high $20s into the low $30s. Regional price activity for April power spanned the high $20s to the low $30s.

In the West, California saw month-ahead power deals advance by roughly 40 cents to the high $20s at North Path-15 and ascend by around $3 to the low $30s at South Path-15. Similar trades rose by 50 cents to the high $10s at Mid-Columbia and climbed by $3 to the high $20s at Palo Verde. April power transactions were done in the low $10s at Mid-Columbia and the mid- to 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.