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AM Power Report: Dailies look to easing demand as temperatures moderate

Following a mixed session Dec. 21, falling demand forecasts should help pressure power dailies across the U.S. on Wednesday, Dec. 21, despite a slight recovery in the natural gas markets.

At last glance, January 2017 natural gas was trading 8.0 cents higher at $3.343/MMBtu, reclaiming some of the 12.9 cents forfeited in the previous session but still down a whopping 40.3 cents since Dec. 9.

With natural gas offering little support, power dailies could look to demand to drive prices as milder weather across most of the country begins to cut into heating demand, especially in the Midwest and Northeast.

Decreased liquidity will also be noted as trading desks begin to thin ahead of the Christmas holiday.

In the East, New England could see load top 18,350 MW on Wednesday and 17,850 MW on Thursday, while load in New York is poised to hit 21,230 MW on Wednesday and 21,092 MW on Thursday. In the Mid-Atlantic, the PJM Western region should see demand reach 59,450 MW on Wednesday and 57,960 MW on Thursday, while the PJM Mid-Atlantic region looks to load peaks of 39,394 MW on Wednesday and 38,371 MW on Thursday.

In the Midwest, demand in the PJM AEP region is expected to reach 19,264 MW on Wednesday and 17,600 MW on Thursday, while load in the ComEd region is poised to reach 14,034 on Wednesday and 13,447 MW on Thursday.

Elsewhere, the ERCOT grid operator sees load reaching 42,679 MW on Wednesday and 42,227 MW on Thursday. On the West Coast, demand in California is expected to reach 30,047 MW on Wednesday and 29,621 MW on Thursday.

Looking farther out, term power products continue to drift mostly lower, reflecting weak action in natural gas futures.

In the East, deals for January 2017 delivery at the NEPOOL Mass hub were pegged near $41, off 4.2% on the day, while PJM West saw front-month action above $45, down 3.2% on the day.

In the Midwest, January 2017 deals across the region were spotted in the upper $30s to low $40s with the PJM AEP-Dayton hub sporting a modest $2 premium to PJM Northern Illinois but near equal footing with MISO Indiana. However, daily changes were mixed with the AD hub up 1.4%, the NI hub down 1.8% and Indiana down 4.2%.

In Texas, ERCOT saw January 2017 deals at the North location fetching some of the lowest prices for the whole country in the high $20s, down 4.3% on the day, near even with the first-quarter 2017 product.

In the West, Northwest markets saw losses across the board with both Mid-Columbia down 1.6% to near $29. In California, January 2017 deals at South Path-15 were spotted in the mid-$30s, about $2 below North Path-15, but with both markets down more than 3% on the day.

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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.