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AM Power Report: Markets eye rising demand, gas prices despite holiday

Despite the approach of the New Year's holiday, which will close most U.S. markets on Monday, Jan. 1, 2018, an anticipated recovery in demand and ongoing gains in the natural gas market could help signal power dailies higher across the U.S. on Friday, Dec. 29.

After ending the previous two sessions with a collective gain of 26.0 cents, the February 2018 natural gas contract continued higher overnight, last trading 5.1 cents higher at $2.965/MMBtu at 7:33 a.m. ET.

Spot gas markets could see mixed cues in the week's final session, as the spot product covers a two-day period that includes the New Year's Day holiday on Jan. 1, 2018, but also frigid cold weather and the return of commercial and industrial demand after the holiday weekend on Jan. 2, 2018.

In the Northeast, New England could see power load top 20,030 MW on Friday and 19,710 MW on Jan. 2, 2018, while load in New York is poised to hit 22,815 MW on Friday and 23,018 MW on Jan. 2, 2018.

In the Mid-Atlantic, the PJM Western region should see demand reach 61,711 MW on Friday and 67,896 MW on Jan. 2, 2018, while the PJM Mid-Atlantic region looks to load peaks of 42,388 MW on Friday and 47,296 MW on Jan. 2, 2018.

In the Midwest, demand in the PJM AEP region is expected to reach 20,014 MW on Friday and 22,244 MW on Jan. 2, 2018, while load in the ComEd region is poised to reach 14,043 MW on Friday and 14,817 MW on Jan. 2, 2018.

Elsewhere, the ERCOT grid operator sees load reaching 45,128 MW on Friday and 61,140 MW on Jan. 2, 2018.

In the West, demand in California is expected to reach 28,463 MW on Friday and 27,294 MW on Saturday, Dec. 30, but with the return of business demand by Jan. 2, 2018 likely to help support buying in the week's final session. Trades in the West on Friday will cover the Jan. 1-2, 2018 delivery days.

Looking further out, most term power products pushed higher Thursday in line with gains in the natural gas futures complex with the near-month products covering the first quarter of 2018 seeing the biggest gains.

In the East, deals for January 2018 delivery at the NEPOOL Mass hub were the exception with trades pegged near $90, off about 13% on the day, while PJM West saw front-month action just below $48.50, up 1.1% on the day.

In the Midwest, January 2018 deals across the region were spotted in the high $30s to low $40s with the MISO Indiana market wrestling 2.8% higher to trade above $39 and with PJM AEP-Dayton up less than 1% to just below $41.75. PJM Northern Illinois hub moved lower, off 0.3% to just above $37.50.

In Texas, ERCOT saw January 2018 deals at the North location fetching the mid- to high $20s, down 0.8% on the day and priced about even with the first-quarter 2018 product.

In the West, Northwest markets saw January 2018 power deals at Mid-Columbia surge 9% to near $29.50. In California, January 2018 deals at South Path-15 were spotted in the high $30s, down 1.5% on the day and about $12 above January 2018 deals at Palo Verde, which were down 3.3% on the day at $27.50.

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