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AM Power Report: Dailies could diverge amid indecisive drivers

Next-day power values could move in diverging directions Thursday, Feb. 15, as traders consider varied demand forecasts for the close of the workweek alongside the recent fluctuation in natural gas futures.

Following a marginal loss at midweek, NYMEX March natural gas futures were stumbling early Thursday ahead of the opening bell. At 6:50 a.m. ET, the contract was down 4.5 cents to $2.542/MMBtu ahead of the midmorning release of the latest round of weekly storage data from the U.S. Energy Information Administration.

Market analysts and experts surveyed are calling for a storage withdrawal for the week ended Feb. 9 of about 180 Bcf. The latest figure will compare to the 120-Bcf year-ago withdrawal and the 154-Bcf five-year average pull.

Day-ahead natural gas prices could shift lower, in line with any sustained losses in futures Thursday.

On the demand side, load outlooks for the close of the workweek are mixed.

In the Northeast, demand in New England is projected to top out at 15,750 MW on Thursday and Friday, while load in New York could reflect a slight downtrend as it is forecast to peak at 19,298 MW on Thursday and 19,226 MW on Friday. Farther south, PJM Western region demand is seen rising to highs near 50,179 MW on Thursday and 52,494 MW on Friday, while PJM Mid-Atlantic load is expected to unwind modestly to crest at 33,320 MW on Thursday and 33,277 MW on Friday.

In the Midwest, stronger demand is anticipated, as PJM AEP region load is forecast to hit highs at 15,614 MW on Thursday and 15,973 MW at the end of the business week, while PJM ComEd load is called to reach 12,343 MW on Thursday and 12,576 MW on Friday.

In the South, load in Texas is forecast to see highs at 39,237 MW on Thursday and 39,747 MW on Friday, joining the uptrend.

In the West, California demand should near 28,350 MW on Thursday and 27,300 MW at the close of the workweek, which should exert pressure on next-day power pricing in the region, with the day's offering typically altered to feature partly weekend parcels for Friday-Saturday delivery.

At the term markets, price action for March power was choppy Feb. 14, as front-month natural gas futures seesawed in trading to imply fluctuating fueling costs before ultimately ending the session on a weak note.

In the East, March power logged a 20-cent increase in transactions done in the low $40s in New England but notched a $1 loss in deals carried out in the low $30s at PJM West. April power changed hands in the low to mid-$30s at both hubs.

In the Midwest, PJM Northern Illinois March was up 70 cents in the high $20s, while March power was quoted in the low $30s in trades almost 30 cents higher on the day at PJM AD and about $2 stronger at MISO Indiana. Power for April was similarly assessed in the high $20s to the low $30s overall.

In the South, prompt-month power values at the ERCOT markets were off 75 cents to as much as $1 in the low $20s into the low $30s, while regional pricing for April power spanned the mid-$20s to the low $30s.

In the West, California saw month-ahead power valued in the high $20s to the low $30s in deals about 40 cents softer on the day at North Path-15 but more than $1 stronger at South Path-15. A similar offering was down 5 cents in the high $10s at Mid-Columbia but up 65 cents in the low $20s at Palo Verde. April power was marked in the low $10s at Mid-Columbia and 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.