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AM Power Report: Dailies could start shortened week mixed to lower

Price action for power dailies could be choppy with a downside bias in the truncated workweek's opening session Tuesday, May 30, as varied demand forecasts for Wednesday combine with the recent weakness at the natural gas futures complex.

Rising 3.5 cents in the May 26 session ahead of the expiration of the June contraction and the onset of the Memorial Day holiday weekend, NYMEX July natural gas futures were solidly lower in early trading Tuesday. Around 6:30 a.m. ET, the new front-month contract was down 11.8 cents to trade near $3.192/MMBtu.

Day-ahead natural gas markets could see mixed to lower moves Tuesday, in step with the recent activity in the futures arena.

On the demand side, grid operators anticipate diverging load as the holiday-shortened workweek unfolds.

In the Northeast, stronger demand is in store, as load in New England is expected to hit highs at 14,000 MW on Tuesday and 14,810 MW on Wednesday, while load in New York is seen cresting at 17,750 MW at the start of the truncated workweek and 18,655 MW on Wednesday. Farther south, PJM Western region demand is poised to decline as it is forecast to top out at 50,480 MW on Tuesday and 48,422 MW on Wednesday, while PJM Mid-Atlantic load is set to rise as it is called to reach 31,182 MW on Tuesday and 33,012 MW on Wednesday.

In the Midwest, softer load is on deck, as PJM AEP region demand is seen peaking at 16,009 MW on Tuesday and 15,142 MW on Wednesday, while PJM ComEd demand is forecast to touch a high near 11,592 MW on Tuesday and 11,319 MW on Wednesday.

In the South, load in Texas should near 54,890 MW at the return of the business week and 51,637 MW on Wednesday, joining the downtrend. In the West, load in California is projected to see highs at 30,150 MW on Tuesday and 29,720 MW on Wednesday.

In term activity, power prices for June were mixed but mostly higher ahead of the long Memorial Day holiday weekend, as gains at the natural gas futures arena signaled a boost in fueling costs.

In the East, the prompt-month power offering was valued at about $35 in deals lifted by 50 cents in New England and bolstered by 20 cents at PJM West. Along the forward curve, power for July delivery was quoted in the high $40s in New England and in the low $40s at PJM West.

In the Midwest, a near 70-cent increase drove PJM AD June to an index close to $36, and an almost 30-cent uptick took PJM Northern Illinois June to an average at about $34, as a roughly $1 gain steered MISO Indiana June to an index near $37. Power prices for July spanned the low $40s overall.

In the South, power transactions for month-ahead delivery were flat at indexes near $32 at ERCOT North and $34 at ERCOT South, up by almost 10 cents at an average atop $30 at ERCOT West and down by 90 cents to an average close to $38 at ERCOT Houston. Regional trading activity for July power was spread in the low $40s to the low $50s.

In the West, California saw front-month power values add about 50 cents to average near $35 at North Path-15 and climb by about 60 cents to an index at above $33 at South Path-15, while prompt-month power pricing was almost unchanged at an average at roughly $20 at Mid-Columbia and up by approximately 60 cents at an index atop $34 at Palo Verde. Price action for July power was pegged in the high $30s in California, high $20s at Mid-Columbia and low $40s at Palo Verde.

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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.