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Most power markets recover with demand forecasts; Southwest dailies flounder

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Essential Energy Insights - October 2021


Most power markets recover with demand forecasts; Southwest dailies flounder

Trading activity across U.S. next-day markets favored gains Friday, Oct. 6, with prices at most locations finding support in forecasts for elevated Oct. 9 demand but with gains at some markets kept in check by lower spot gas prices.

Despite warmer weather outlooks, the front-month November natural gas futures contract remained tethered to the downside Friday and closed the session with a 6.0-cent loss at $2.863/MMBtu. Mirroring slack weekend load outlooks, spot gas markets, with the exception of the Henry Hub, ticked lower and failed to provide a boost to power prices.

In near-term weather, Tropical Storm Nate is currently forecast to make landfall on the U.S. Gulf Coast by Oct. 8 as a Category-1 hurricane, which could depress demand at the start of the next workweek.

Looking at nuclear supply, increased production at Southern Co.'s Vogtle 2 in Georgia helped lift total U.S. nuclear plant availability to 91.75% on Oct. 6 but with a number of units slated to be taken offline in the coming days for planned seasonal work.

East dailies rebound on demand forecasts

Power markets in the East held modest premiums Friday following strong Oct. 9 load forecasts but limited by cheaper spot gas.

At next-day markets, the New England Mass hub saw power trade more than $10 higher in the mid-$40s while deals at PJM West were more than $5 higher on the session in the mid- to high $40s.

Demand in both in the Northeast and mid-Atlantic is expected to rise with New England load called to reach 14,990 MW on Friday and 16,920 MW on Oct. 9, while load in New York may reach peaks of 19,150 MW on Friday and 20,634 MW on Oct. 9. The PJM Mid-Atlantic region is forecast to see demand peak at 37,109 MW on Friday and 39,876 MW on Oct. 9, while the PJM Western region should see load crest at 50,482 MW on Friday and 54,624 MW on Oct. 9.

Midwest markets notch gains on load support

Daily power prices in the Midwest were firm Friday amid strong demand forecasts and cheaper spot gas. PJM AEP-Dayton saw the bulk of Friday's trading activity with deals pegged in the mid-$40s, up roughly a dollar on the session.

Grid operators in the region are projecting elevated demand to kick off the new workweek with load in the PJM AEP region possibly running up to 15,526 MW on Friday and 16,978 MW on Oct. 9, while demand in the PJM ComEd region should top out at 11,989 MW on Friday and 12,393 MW on Oct. 9.

Texas dailies close workweek boosted by demand outlooks

Daily power prices in Texas were biased higher Friday as robust Oct. 9 demand forecasts countered pressures from varied spot gas prices.

The Electric Reliability Council of Texas is projecting peaks of 55,203 MW on Friday and 60,077 MW on Oct. 9. Following the demand outlook, next-day deals at ERCOT North were done in the mid-$30s, rising from a Thursday index of $25.88.

Northwest, Calif. dailies rise; Southwest values tumble in revised trade

Power packages in the West, excluding those traded in the Southwest, favored gains Friday as elevated weekday demand associated with next-day schedule revisions worked to offset lower spot gas prices.

In the Northwest, power prices at Mid-Columbia and the California-Oregon Border added around $5 to $7 from Thursday, with deals in the high $20s to low $30s at the former and the mid-$30s at the latter. In California, South Path-15 transactions were heard in the mid-$30s, adding close to a dollar from Thursday.

Conversely, Southwest values tumbled with Palo Verde packages falling around $10 in the mid- to high $20s while Mead trades were seen in the high $20s, down about $6 on the session.

The California ISO is calling for demand to reach 32,165 MW on Friday and 30,539 MW on Saturday but with load possibly rebounding at the start of the new workweek on Oct. 9.

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, natural gas and coal index prices, as well as forwards and futures, visit our Commodities Pages