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AM Power Report: Dailies could end week mixed amid dueling fundamentals

Power dailies could end the workweek aimed in diverging directions Friday, Jan. 27, as expectations for elevated demand in much of the country coming off the weekend run counter to renewed losses at the natural gas futures complex.

Rising 5 cents on Jan. 26 ahead of the expiration of the options contract, February natural gas futures were solidly lower early Friday on profit-taking and fresh selling. At last look, the February contract was down 10.3 cents to trade near $3.279/MMBtu in front of its afternoon expiration. March natural gas futures were down 10.5 cents to trade near $3.292/MMBtu early Friday.

Amid the recent seesaw action in futures, next-day natural gas markets could see slightly mixed moves with a bias lower Friday, with the inclusion of the lower-load weekend days in the trading product offering the typical pressure on values.

On the demand side, most grid operators across the country see stronger load at the start of the next workweek on Jan. 30, as business-related demand typically rebounds coming off the weekend.

In the Northeast, demand in New England is expected to see highs at 16,360 MW on Friday and 17,720 MW on Jan. 30, while load in New York is forecast to peak at 19,975 MW on Friday and 21,429 MW on Jan. 30. In the Mid-Atlantic, PJM Western region demand is seen hitting highs at 56,741 MW on Friday and 58,960 MW at the return of the business week, while PJM Mid-Atlantic load is projected to crest at 36,861 MW on Friday and 40,255 MW on Jan. 30.

In the Midwest, demand in PJM AEP region is poised to top out at 17,772 MW on Friday and 18,308 MW at the start of the new workweek, while load in PJM ComEd is forecast to touch a high near 13,098 MW on Friday and 13,351 MW on Jan. 30.

In the South, ERCOT load should near 44,486 MW on Friday and 42,166 MW on Jan. 30, running against the dominant uptrend.

In the West, demand in CAISO is called to reach 29,260 MW on Friday and 27,356 MW on Jan. 28 but should find some upside momentum at the start of the next workweek Jan. 30 amid the typical post-weekend recovery of full industrial and commercial demand.

At the term markets, the price of power for February was predominantly biased higher Jan. 26, in line with front-month natural gas futures that extended gains on the session to ultimately keep fueling costs elevated.

In the East, NEPOOL-Mass February added 85 cents in deals carried out atop $60, while PJM West February shed a little over $1 against the dominant uptick in trades done near $40. Along the forward curve, power for March delivery was transacted in the low $50s in New England and in the high $30s at PJM West.

In the Midwest, prompt-month power values faltered by about $1 against the broad uptrend to an index at above $37 at PJM AD but advanced by near 20 cents to average atop $36 at PJM Northern Illinois, as MISO Indiana month-ahead power pricing rose by about $2 to an index at $43. Price activity for March power across the three hubs likewise spanned the high $30s to the low $40s.

In the South, gains between 40 cents and 50 cents at the ERCOT markets took transactions for February power to indexes ranging from $27 to $33, as regional trading action for March power similarly ran through the high $20s to the low $30s.

In the West, California saw front-month power prices tack on about $1 to average near $37 at North Path-15 and at close to $35 at South Path-15, while Mid-Columbia February was lifted by $1 to an index near $31, and Palo Verde February was bolstered by about 50 cents to an index above $27. Power for March delivery was marked in the high $20s to low $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.