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AM Power Report: Dailies could slump with demand forecasts in week's closer

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AM Power Report: Dailies could slump with demand forecasts in week's closer

Power dailies could end the workweek with losses Friday, Feb. 2, as generally softer demand expectations coming off the weekend combine with the recent weakness in natural gas.

Sinking nearly 14.0 cents in the Feb. 1 session, front-month March natural gas futures were recovering ahead of the opening bell on pre-weekend short covering. At 6:55 a.m. ET, the NYMEX natural gas futures contract was up 3.6 cents to $2.892/MMBtu.

Day-ahead natural gas markets could turn lower, with the recent tumble in futures and the inclusion of the lower-load weekend days in the trading package Friday likely to offer pressure.

In terms of demand, outlooks suggest varied but mostly weaker load at the start of the next workweek on Feb. 5, despite the typical post-weekend rebound in business-related demand.

In the Northeast, demand in New England could peak at 17,940 MW on Friday and 17,420 MW on Feb. 5, while load in New York is expected to hit highs at 21,501 MW on Friday and 21,396 MW on Feb. 5. In the Mid-Atlantic, PJM Western region demand is seen cresting at 60,779 MW on Friday and 60,060 MW on Feb. 5, while PJM Mid-Atlantic load is called to reach 38,984 MW on Friday and 39,025 MW at the start of the next business week.

In the Midwest, demand in the PJM AEP region is forecast to top out at 19,235 MW on Friday and 18,993 MW on Feb. 5, while load in PJM ComEd is seen reaching highs at 14,016 MW on Friday and 13,724 MW on Feb. 5.

In the South, Texas demand should near 43,832 MW on Friday and 41,935 MW at the return of the workweek.

In the West, demand in California is forecast to see highs at 28,050 MW on Friday and 26,143 MW on Feb. 3 but should find some upside support Feb. 5, as full industrial and commercial demand recovers coming off the weekend.

Along the forward curve, power prices for March delivery were tethered to the downside across the board in their first day as the front-month offering Feb. 1, in tandem with March natural gas futures that deflated to ultimately signal cheaper fueling costs.

In the East, transactions for March power tumbled by about $6 to the mid-$50s in New England and fell by $4 to the high $30s at PJM West. Power trades for April were carried out in the mid-$30s in New England and the low $30s at PJM West.

In the Midwest, the prompt-month power offering was valued in the high $20s in deals off roughly $6 at PJM AD, down approximately $2 at PJM Northern Illinois and almost $5 lower at MISO Indiana. Farther along the forward curve, April power parcels were likewise marked in the high $20s overall.

In the South, losses of between $3 and $4 at the ERCOT hubs steered price action for March power to the low $20s into the low $30s. Regional pricing for April power delivery spanned the high $20s to the low $30s.

In the West, both North Path-15 and South Path-15 in California saw month-ahead power values flounder by more than $1 to the high $20s. Mid-Columbia March and Palo Verde March deals slumped by more than $1 to the low $10s and the low $20s, respectively. Power prices for April were pegged in the mid-$10s at Mid-Columbia and in the low to high $20s elsewhere in the region.

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