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AM Power Report: Most dailies could be aimed lower amid expected demand drop

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AM Power Report: Most dailies could be aimed lower amid expected demand drop

Power prices at the daily markets could be aimed lower at most markets Thursday, Dec. 21, amid predominantly weaker demand outlooks for the close of the workweek.

Traders will also keep attuned to natural gas market activity for power price direction. Losing 5.5 cents in the midweek session, NYMEX January 2018 natural gas futures were edging lower early Thursday, down 0.8 cent to $2.629/MMBtu at last look on light profit taking ahead of the midmorning release of the weekly storage data.

The report to be released by the U.S. Energy Information Administration is expected to show a triple-digit pull for the week ended Dec. 15, as colder weather in many major consuming regions likely drove demand higher. An average 173-Bcf pull is anticipated, which will compare to the 200-Bcf year-ago withdrawal and the 125-Bcf five-year average pull.

On the demand side, most grid operators anticipate diminished load at the close of the workweek, when business-related demand tapers off approaching the weekend break.

In the Northeast, demand in New England is expected to see highs at 18,100 MW on Thursday and 18,000 MW on Friday, while load in New York is forecast to hit highs at 20,969 MW on Thursday and 20,233 MW at the end of the business week. To the south, PJM Western region load is projected to top out at 55,738 MW on Thursday and 48,878 MW on Friday, while PJM Mid-Atlantic demand is called to reach 38,761 MW on Thursday and 34,235 MW on Friday.

In the Midwest, load in PJM AEP region could peak at 18,108 MW on Thursday and 14,932 MW on Friday, while load in PJM ComEd could crest at 13,271 MW on Thursday and 11,637 MW on Friday.

In the South, Texas demand is projected to touch a high near 41,013 MW on Thursday and 42,771 MW at the close of the workweek, bucking the wider decline.

In the West, load in California should near 31,620 MW on Thursday and 31,130 MW on Friday, as traders continue to book revised products to account for the upcoming weekend and Christmas holiday when the markets will be closed.

At the term markets, price action for January 2018 power was choppy at midweek, as weakness in the natural gas futures arena that implied cheaper fueling costs ran against supportive weather-related demand prospects.

In the East, front-month power deals were up more than $2 day on day in the low $70s in New England but off 10 cents in the low $40s at PJM West. Farther along the forward curve, power transactions for February 2018 were spotted also in the low $70s in New England and in the high $30s to the low $40s at PJM West.

In the Midwest, January 2018 power was quoted in the low to high $30s in trades 10 cents higher on the day at PJM Northern Illinois but nearly 50 cents softer at PJM AD and roughly 90 cents lower at MISO Indiana. February 2018 power was marked in the low to mid-$30s overall.

In the South, roughly 50-cent gains at the ERCOT hubs steered price activity for month-ahead power to the low to high $20s. Regional pricing for February 2018 power spanned the low to high $20s.

In the West, California saw January 2018 power slump 50 cents to the high $30s at North Path-15 and the low $40s at South Path-15. Mid-Columbia and Palo Verde saw prompt-month power give back $1 to $2 in trades discussed in the high $20s to the low $30s. Power for February 2018 delivery was valued in the low to mid-$30s in California and in the low to mid-$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.