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Daily power markets supported by strong demand, rising gas prices

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Daily power markets supported by strong demand, rising gas prices

Next-day power markets across the U.S. were mixed to slightly higher Tuesday, Dec. 5, as values at most locations found support from elevated demand forecasts and rising spot natural gas prices.

Losses continued to define natural gas futures trading with the front-month January 2018 contract closing the day down 7.1 cents at $2.914/MMBtu. On the other hand, spot gas markets were biased higher and provided power prices with support.

Looking at the supply of nuclear generation, total plant availability eased to 95.63% early Dec. 5.

East values firm with fundamental boost

Power values at next-day markets were firm Tuesday following rising demand forecasts and higher spot gas prices.

At next-day markets, the New England Mass hub saw power priced in the low $30s, little changed from Monday, while PJM West trades were pegged in the high $20s to low $30s, around a dollar higher than the day prior.

Day-ahead markets in the Northeast also leaned flat to slightly higher. Deals at the Mass hub, New York Zone G and New York Zone J added less than a dollar from Monday with packages averaging $32.38, $30.85 and $31.40, respectively, while New York Zone A deals were up more than a dollar and averaged $26.30.

The Northeast should see mixed demand. Load in New England may see highs of 16,900 MW on Tuesday and 16,600 MW on Wednesday, while demand in New York should peak at 19,887 MW on Tuesday and 20,390 MW on Wednesday. Grid operators in the mid-Atlantic are calling for elevated demand by midweek. The PJM Mid-Atlantic region could see load crest at 35,239 MW on Tuesday and 36,152 MW on Wednesday, while load in the PJM Western region might top out at 53,793 MW on Tuesday and 56,271 MW on Wednesday.

Elevated load, higher gas prices lift Midwest values

A combination of strong demand forecasts and higher spot gas prices provided a small boost to power markets in the Midwest on Tuesday.

MISO Indiana saw the bulk of Tuesday's action with power changing hands in the low $30s, up slightly from a Monday index of $30.50.

Demand is set to rise by midweek as the PJM AEP region should note highs of 16,367 MW on Tuesday and 18,323 MW on Wednesday, while demand in the PJM ComEd region may near peaks of 13,070 MW on Tuesday and 13,362 MW on Wednesday.

Texas day-ahead deals edge higher with demand outlooks

Robust demand forecasts countered mixed spot gas prices and provided day-ahead power markets in Texas with a premium Tuesday.

The Electric Reliability Council of Texas is calling for highs of 41,275 MW on Tuesday and 47,097 MW on Wednesday.

Following the load forecast, day-ahead deals rose by $2 to $7 on the session and averaged $27.37 at ERCOT Houston, $26.36 at ERCOT North, $27.44 at ERCOT South and $27.30 at ERCOT West.

West markets biased lower despite strong fundamentals

Western U.S. power markets saw mixed to lower moves Tuesday despite calls for increased midweek demand and support from gains in spot gas markets.

In California, power at North Path-15 bordered the low $40s, down more than $10 from Monday, while values at South Path-15 were quoted in the mid-$40s to low $50s, about $3 lower from Monday. In the Southwest, Palo Verde on-peak trades saw little change on the session and ranged in the high $20s. In the Northwest, Mid-Columbia transactions were flat to Monday and spanned the low $20s, while the California-Oregon Border hub saw power priced in the high $20s to low $30s, around $2 lower than Monday.

The California ISO is projecting load to hit 31,010 MW on Tuesday and 31,208 MW on Wednesday.

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.