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Power dailies pressured by demand; East markets supported by gas

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Essential Energy Insights - February 2021

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


Power dailies pressured by demand; East markets supported by gas

Power prices across the U.S. leaned mixed toultimately lower Thursday, March 31, with dailies in the West, Texas and theMidwest pressured by outlooks suggesting softer Friday demand while markets inthe East were supported by an uptick in spot natural gas prices.

After a round of thin trading overnight, the front-month May natural gasfutures contract closed the session down 3.7 cents at $1.959/MMBtu. Providing pressureon the front-month contract was the release of storage data from the U.S.Energy Information Administration, which showed a from natural gasinventories in the Lower 48 during the week ended March 25, slightly aboveconsensus expectationsand above historical averages. On the flipside, spot natural gas markets werebiased higher with only trades at SoCal border going the other way.

In other supply, the return of 's Columbia GeneratingStation in Washington and EntergyCorp.'s Grand Gulf 1 in Mississippi along with increased output atEntergy's Pilgrim 1 in Massachusetts, TennesseeValley Authority's Browns Ferry 3 in Alabama and 's Vogtle 2 in Georgiahelped offset a curtailment at DukeEnergy Corp.'s Brunswick 1 in North Carolina and sent total U.S.nuclear plant availabilityhigher again early March 31 at 85.61%, up from 85.03% on March 30 and alsoabove the 85.21% level recorded on the same day in 2015.

Risinggas offsets slack demand, sends East dailies higher

Next-day power markets in the East notched gainsThursday, as support from flat to higher spot natural gas prices was able toundermine pressures from weaker Friday load forecasts.

Next-day deals at NEPOOL-Mass were done in the low tomid-$20s, up from an index of $20.25 posted on Wednesday, while trades at PJMWest were seen in the high $20s, adding less than a dollar from midweek.

Day-ahead markets ran the other way, with DAMtransactions at New York Zone A losing more than $10 from Wednesday to fall toan average of $34.36, while DAM deals at New York Zone J shed close to $4 toaverage $22.94. DAM trades at NEPOOL-Mass and New York Zone G were mixed butsaw little change overall with the latter easing on the session to average$22.21 and the former adding less than a dollar to average $19.68.

Supporting power packages were flat to higher spotnatural gas prices. Gas trades at TETCO-M3 added more than 5 cents and averagedabove $1.25/MMBtu, while deals at Transco Zone 6 New York and AlgonquinCitygates were flat to the midweek and retained averages close to $1.30/MMBtuand around $1.30/MMBtu, respectively.

Demand in the Northeast is softer, with peak load inNew England potentially hitting 14,160 MW on Friday, down 480 MW from Thursday,while demand in New York is called to reach highs at 17,682 MW on Friday,shedding close to 350 MW from the day prior.

Load in the Mid-Atlantic is mixed, with the PJMMid-Atlantic region anticipating demand to peak at 30,692 MW on Friday, up morethan 200 MW from Thursday, while the PJM Western region foresees load to crestat 45,741 MW on Friday, slipping more than 400 MW from the previous day.

Midwestdailies post muted moves amid conflicting fundamentals

Power packages in the Midwest saw little changeThursday as dailies sought direction in the midst of diverging signals fromlower Friday load outlooks and higher spot natural gas prices. PJM AEP-Daytonsaw most the session's action, with power deals done in the high $20s, flat toWednesday.

Demand outlooks in the Midwest are aimed lower, withthe PJM AEP region foreseeing a Friday peak at 14,473 MW, down close to 450 MWfrom Thursday, while the PJM ComEd region predicts peak Friday load to touch10,974 MW, dropping close to 300 MW from the prior day.

Spot gas markets favored the upside and supportedpower packages. Gas deals at NNG Demarc added more than 5 cents to climb to anaverage close to $1.90/MMBtu, while trades at Chicago Citygates were a centhigher from the midweek and averaged around $1.95/MMBtu.

ERCOTmarket losses contained by climbing gas

Power parcels in Texas favored the downside Thursday,as dailies yielded to pressures of markedly weaker Friday load forecasts butwere supported by gains in spot natural gas markets.

Peak demand in Texas is projected to fall on the finalday of the workweek, with ERCOT predicting Friday load to run up to 35,847 MW,plunging more than 6,700 MW from Thursday. Bogged down by demand, next-daydeals at ERCOT North saw a daily loss of close to $4 and were done in the highteens and low $20s.

Day-ahead markets also reflected lower load forecasts,with most markets losing $7 to $8 from the midweek to post averages of $17.04at ERCOT Houston, $16.97 at ERCOT North, $16.92 at ERCOT South and $17.05 atERCOT West.

Spot gas markets continued to move higher, with gastrades at El Paso Permian gaining roughly 4 cents on the session to averagearound $1.75/MMBtu, while transactions at the Henry Hub climbed by about 10cents from Wednesday and averaged above $1.90/MMBtu.

MostWest markets flounder while Palo Verde dailies firm

Price activity in the West was oriented to thedownside Thursday, as forecasts suggesting lower demand due to next-dayschedule revisions counterbalanced limited support from mixed spot natural gasprices.

Next-day deals in the West were done for the combineddelivery days of April 2-3, with the inclusion of the usually lower loadweekend day providing downward pressure on values.

Power dailies in the Northwest saw losses of roughly$5 from Wednesday and were done in the low teens at both Mid-Columbia and COB.Power markets in California were more than a dollar lower from the midweek withtrades at North Path-15 pegged in the low $20s while transactions at SouthPath-15 were posted in the high teens.

Hubs in the Southwest leaned flat to lower, with dealsat Mead and Palo Verde both quoted in the high teens with the latter addingless than a dollar on the session while the former noted a daily loss of around$2.

Spot natural gas markets moved in different directionsand gave dailies limited support. Gas trades at Malin increased by about 2cents from Wednesday and averaged above $1.75/MMBtu, while transactions atPG&E Citygates were flat to Wednesday and retained an average around$1.95/MMBtu, Deals at SoCal Border eased on the session and averaged slightlybelow $1.80/MMBtu.

Demand in California is expected to fall, with theCAISO grid operator projecting a Friday high at 26,984 MW, down roughly 600 MWfrom Thursday with load expected to fall even harder over the weekend.

Market prices and included industry data are currentas of the time of publication and are subject to change. For more detailedmarket data, including power, naturalgas and coal indexprices, as well as forwards and futures,visit our Commodities Pages.