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Power dailies find little support; Midwest markets hold steady

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Power dailies find little support; Midwest markets hold steady

Next-day power values across major U.S. markets, withthe exception of deals done in the Midwest, held a downward bias Thursday, May5, with losses at most hubs driven by outlooks calling for falling Fridaydemand and little support from mixed to predominantly lower spot natural gasprices.

At the natural gas futures complex, the front-monthJune contract ended the session down 6.5 cents at $2.076/MMBtu. Providingpressure to June gas was storage data from the U.S. Energy InformationAdministration, which reported a net68-Bcf injection into natural gas inventories in the Lower 48during the week ended April 29 that was slightly better than market . Likewise, spotnatural gas markets faltered, with hubs in the East seeing sizable losses.

In other supply, total U.S. hit anotherlow again for the current spring season as it stumbled to 81.19% early May 5,dropping from 81.61% on May 4 and still well below the 84.44% noted on the sameday a year ago.

Eastdailies decline with falling demand, slack gas

Next-day power packages in the East lost some valueThursday owing to a lack of support from expectations of lower Friday demandand a downtick in spot natural gas prices.

Next-day deals at NEPOOL-Mass and PJM West were bothdone in the high $20s, each down from midweek indexes of $32.75 and $29.50,respectively.

Day-ahead markets in the Northeast also retreated withslack demand, with NEPOOL-Mass, New York Zone A and New York Zone G slipping by$1 to $2 from the midweek to post averages of $26.68, $26.32 and $25.42,respectively, while DAM deals at New York Zone J shed less than a dollar toaverage $29.25.

Spot gas markets ended four sessions of gains andfailed to support dailies. Gas deals at TETCO-M3 fell by more than 30 cents toaverage around $1.50/MMBtu, while trades at Transco Zone 6 New York lost morethan 10 cents on the session to average below $1.85/MMBtu.

Demand forecasts in the Northeast and Mid-Atlantic areaimed lower, with peak load in New England possibly hitting 13,740 MW onFriday, down more than 700 MW from Thursday, while demand in New York may see ahigh at 17,292 MW on Friday, dropping more than 400 MW from the day prior.

The PJM Mid-Atlantic region expects load to reach29,665 MW on Friday, tumbling by more than 1,200 MW from Thursday, while thePJM Western region forecasts demand to peak at 45,567 MW on Friday, slipping byaround 900 MW from day before.

Midwestmarkets firm despite choppy demand, cheap gas

Power parcels in the Midwest were steady Thursday, asdailies were able to withstand pressures from varied load forecasts and a lackof support due to losses in regional spot natural gas markets. Most of thesession's next-day action was focused at MISO Indiana, where power was tradedin the low $30s for a daily premium of less than a dollar.

PJM regions in the Midwest predict slightly variedload at the end of the workweek, as demand in the PJM AEP region may crest at14,685 MW on Friday, down by about 300 MW from Thursday, while peak load in thePJM ComEd region should touch 11,012 MW on Friday, up but little changed fromthe Thursday's forecasted high.

Spot gas markets floundered, with Chicago Citygatesand NNG Demarc dropping more than 5 cents from the midweek to post averagesaround $2.00/MMBtu and below $1.95/MMBtu, respectively.

Texasdailies falter with demand

Trading activity in the Texas favored losses Thursday,as outlooks calling from declining Friday load offset little support fromvaried spot natural gas prices.

Load in Texas is set to fall on the final day of theworkweek, with the ERCOT grid operator estimating demand to run up to 45,528 MWon Friday, about 1,700 MW lower than Thursday's forecasted peak. Depressed bysluggish load, next-day power at ERCOT North traded for a loss of around $2 indeals done in the low $20s.

Day-ahead markets also favored the downside, withERCOT West losing more than $5 to average $17.03, while DAM deals at ERCOTNorth and ERCOT South shed more than a dollar to post averages of $21.20 and$21.18, respectively. DAM trades at ERCOT Houston limited losses to less than adollar to average $22.17.

Spot gas markets in the South were jumbled, with theHenry Hub adding around 5 cents from Wednesday to average above $2.00/MMBtu,while deals at El Paso Permian slipped by about 3 cents to average below$1.90/MMBtu.

Westmarkets lose ground in revised trade

Power prices across the West took a few steps backThursday, as dailies were depressed by forecasts suggesting weaker Friday loadand no support from flat to lower spot natural gas prices.

Next-day deals in the West were done for the combineddelivery days of May 6-7, with the inclusion of the usually lower demandweekend day in the product offering downward pressure on prices.

In California, power deals at South Path-15 lost closeto $2 in the low $20s. Trades in the Southwest also embraced the downside withboth Palo Verde and Mead posting losses of more than $4 with transactions atboth hubs done in the high teens. Hubs in the Northwest continued the trend,with Mid-Columbia dropping around $2 in the low to mid-teens while powerpackages at COB shed less than a dollar from the midweek in a range spanningthe low $20s.

Providing no support for power dailies was a downtickin spot natural gas prices. Gas deals at Malin and PG&E Citygates stumbledby 2 cents to 3 cents from Wednesday to drop to averages below $1.95/MMBtu and$2.15/MMBtu, respectively, while trades at SoCal Border slipped by less than acent and retained an average below $2.00/MMBtu.

The California ISO predicts that demand may top out at27,183 MW on Friday, down by around 1,000 MW from Thursday.

Market prices and included industry data are currentas of the time of publication and are subject to change. For more detailedmarket data, including power,natural gas andcoal index prices, as well asforwards andfutures, visit our Commodities Pages.