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AM Power Report: Dailies could rise with demand

Power dailies could favor the upside Thursday, June 8, as traders consider predominantly supportive demand expectations for the close of the workweek alongside stalled natural gas futures trading activity.

Easing more than 2.0 cents on the day, NYMEX front-month July natural gas futures were trending slightly higher, gaining 1.6 cents to $3.036/MMBtu at 6:15 a.m. ET on Thursday ahead of the midmorning release of weekly natural gas storage data.

The report, to be issued by the U.S. Energy Information Administration for the week ended June 2, is expected to detail an average 98-Bcf injection for the period. The figure will compare to the 94-Bcf five-year-average injection and the 68-Bcf addition for the same week in 2016.

In terms of demand, forecasts point to stronger load across the bulk of the country at the close of the workweek, even as business-related demand typically wanes approaching the weekend.

In the Northeast, load in New England is poised to defy the broad uptrend as it is called to reach 14,750 MW on Thursday and 14,560 MW on Friday, while demand in New York is expected to top out at 18,452 MW on Thursday and 19,097 MW on Friday. To the south, PJM Western region demand is seen cresting at 49,180 MW on Thursday and 52,145 MW on Friday, while PJM Mid-Atlantic load is projected to touch a high near 31,025 MW on Thursday and 32,140 MW at the close of the workweek.

In the Midwest, demand in PJM AEP region is expected to see highs at 14,900 MW on Thursday and 15,526 MW at the end of the business week, while load in PJM ComEd is seen reaching highs at 13,055 MW on Thursday and 14,275 MW on Friday.

In the South, load in Texas could hit highs at 56,761 MW on Thursday and 56,641 MW on Friday. In the West, demand in California could peak at 30,000 MW on Thursday and 29,670 MW at the close of the workweek, which should exert pressure on power prices in the region Thursday, as market participants move revised, partly weekend parcels for Friday-Saturday delivery.

Along the forward curve, power for July had a predominantly strong showing June 7, as generally supportive weather-related demand expectations reflected more on values than did losses at the natural gas futures arena that implied a slump in fueling costs.

In the East, front-month power parcels were quoted between $42 and $43 in deals off about 80 cents against the broad uptrend in New England but up by 10 cents at PJM West. Power packages for August delivery were similarly marked in the low $40s at both hubs.

In the Midwest, the power offering for July was also valued between $42 and $43 in trades about $1 higher day on day at PJM AD and more than $2 stronger at PJM Northern Illinois but almost $2 weaker at MISO Indiana. Power for August delivery was likewise transacted in the low $40s overall.

In the South, price activity for month-ahead power shed around $1 against the dominant advance to average close to $49 at ERCOT Houston but climbed by 50 cents to nearly $2 to indexes ranging from $41 to $47 at the rest of the ERCOT markets. Regional price action for August power was spread in the low to mid-$60s.

In the West, California saw power values for July tack on more than $1 to average near $36 at North Path-15 and about $37 at South Path-15, as Mid-Columbia July power advanced by about 30 cents to an index atop $26, and Palo Verde July deals rose by more than $1 to an index at almost $40. Farther along the forward curve, pricing for August power was pegged in the low $30s at Mid-Columbia and in the high $30s 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.