U.S. power dailies put in another mixed session Thursday, Dec. 29, but with very little overall change as varied load forecasts combined with stronger spot natural gas prices.
With markets trading their last next-day product for delivery in 2016, market participants also noted decreased liquidity as trading desks thin ahead of the New Year's holiday, which will close most markets on Monday, Jan. 2, 2017.
After the January 2017 natural gas contract expired with a 16.9-cent gain to a two-year high in the previous session, the new front-month February 2017 contract eased 9.6 cents lower at $3.802/MMBtu, even after the report of a surprisingly large withdrawal from storage in the week ended Dec. 23. However, cooler weather and the prior-day gains in futures still helped most spot gas markets higher by about 5 cents with bigger gains in the Northeast.
With natural gas offering little support, power dailies also looked to demand to underpin prices as cooler weather across most of the country begins to drive up heating demand.
East markets mixed with demand in muted trade
The price of next-day power in the eastern U.S. drifted in mixed directions Thursday, reflecting choppy load patterns and varied moves in spot gas prices.
At the New England Mass hub, dailies eased less than $1 to an index near $50, while deals at the PJM West hub were done in the low $30s, also very little changed from prior-day action.
Day-ahead markets failed to display any more enthusiasm. The Mass hub saw DAMs average almost $7 lower at $44.51, while in New York average DAMs fell by $1 or $2 and were pegged at $20.50 in Zone A, $49.28 in Zone G and $49.07 in Zone J.
Setting a choppy tone was demand. New England could see load top 17,250 MW on Friday, off more than 500 MW on the day, while peak load in New York is poised to hold steady at just below 21,000 MW through Friday. In the mid-Atlantic, the PJM Western region should see demand approach 56,000 MW on Friday, up almost 1,000 MW on the day, while the PJM Mid-Atlantic region could see load peak at 37,862 MW on Friday, up almost 1,500 MW day on day.
At spot gas markets, gains varied from next to nothing at Tetco M3 to more than 25 cents at Transco Zone 6 NY and to nearly 50 cents in New England.
Load underpins Midwest dailies in quiet trade
Power trading in the Midwest remained very quiet Thursday but with most markets holding firm or even edging slightly higher with the support of regional load outlooks.
MISO Indiana remained one of the more active trading hubs, with deals in the low to mid-$30s marking a daily gain of about $2.
Demand in the PJM AEP region is expected to reach 17,256 MW on Friday, up almost 500 MW on the day, while peak load in the ComEd region is poised to hold steady at just above 13,000 MW through Friday.
ERCOT values slip despite recovering demand
While remaining quiet overall, the day-ahead markets in ERCOT continued to weaken slightly on Thursday, even as demand is seen bouncing back to end the workweek.
Day-ahead deals were done throughout the mid- and upper $20s for daily gains of about $1 in most cases. Average DAMs were pegged at $24.78 at ERCOT West, $25.25 at ERCOT North, $26.21 at ERCOT Houston and $26.32 at ERCOT South.
The ERCOT grid operator sees load reaching 39,534 MW on Friday, almost 750 MW above Thursday's projected peak.
West markets retreat with partly weekend trading product
Western U.S power markets drifted lower Thursday, due in large part to a revision in trading packages ahead of the New Year's holiday.
Deals at West Coast power markets on Thursday covered delivery for Friday, Dec. 30, and Saturday, Dec. 31, with the softer weekend demand helping to reduce the value of the next-day product.
After firming earlier in the week, Northwest markets pulled back by almost $1 at COB and by more than $2 at Mid-Columbia, to indexes in the low $30s and high $20s, respectively.
Power at South Path-15 in California was traded in the low to mid-$30s for a daily loss of more than $2, while Mead shed about $1 to an index near $26 and Palo Verde fell almost $2 to an index in the low $20s.
Demand in California is expected to reach 28,507 MW on Thursday and 27,891 MW on Friday before falling harder by Saturday.
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.