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AM Power Report: Prices lean lower amid weak fundamentals

Powerdailies could notchlosses Thursday, April 7, as expectations for softer demand in much of thecountry at the close of the workweek conspire with steadily decliningfront-month natural gas futures.

in theprevious session, May natural gas futures were extending lower early Thursday,down another 1.5 cents to $1.896/MMBtu, ahead of the midmorning release ofweekly inventory data from the U.S. Energy Information Administration.

Asurvey of analysts and traders is calling for an average 8-Bcf injection into storage forthe week ended April 1. This would compare to a five-year average withdrawal of19 Bcf and the 6-Bcf injection reported for the same week in 2015. Totalnatural gas supply is on track to post a new end-of-season record high.

Onthe demand side, outlooks suggest mixed but predominantly lower load at theclose of the workweek, when business-related demand typically tapers offapproaching the weekend break.

Inthe Northeast, grid operators anticipate softer load, as demand in New Englandis called to reach 15,010 MW on Thursday and 14,320 MW on Friday, while load inNew York is forecast to touch a high near 18,721 MW on Thursday and 18,162 MWon Friday. In the Mid-Atlantic, mixed demand is in store, as PJM Western regiondemand is projected to peak at 48,947 MW on Thursday and 49,721 MW on Friday,while PJM Mid-Atlantic load is poised to hit a high at 31,144 MW on Thursdayand 30,408 MW at the end of the workweek.

Inthe Midwest, forecasts also suggest varied load, as demand in the PJM AEPregion is projected to crest at 15,826 MW on Thursday and 16,337 MW on Friday,while load in PJM ComEd is expected to top out at 11,449 MW on Thursday and11,335 MW on Friday.

Inthe South, demand in ERCOT should near 42,233 MW on Thursday and 37,681 MW atthe close of the business week, joining the wider decline.

Inthe West, load in CAISO could reach highs at 28,325 MW on Thursday and 27,300MW on Friday, which should work to put downside pressure on next-day powerpricing in the region Thursday as traders book revised partly weekend parcelsfor Friday-Saturday delivery.

Inforward trade, power prices for May were varied but mostly lower at midweek, asongoing weakness at the natural gas futures complex kept fueling costs tetheredto the downside.

Inthe East, NEPOOL-Mass saw front-month power pricing retreat by 20 cents to near$32, as PJM West saw month-ahead power values flounder by roughly 80 cents toalmost $33. Along the forward curve, price activity for June power at the twohubs was pegged in the low to mid-$30s.

Inthe Midwest, transactions for May power climbed by roughly 60 cents against thewider decline to average at around $31 at PJM AD, but deflated by about 70cents at PJM Northern Illinois and slid by a little more than 50 cents at MISOIndiana to indexes holding near equal footing at almost $28. Looking ahead,power deals for June delivery at the three hubs likewise spanned the high $20sto the low $30s.

Inthe South, prompt-month power values at the ERCOT markets recoiled by about 60cents across the board to indexes spread from roughly $23 to $25, as regionalpricing for June power delivery ran through the high $20s overall.

Inthe West, California saw power deals for May advance by 15 cents against thebroad downtrend to average at about $22 at North Path-15 and hold nearunchanged at an index around $19 at South Path-15, as Mid-Columbia May deflatedby roughly 20 cents to above $9 and Palo Verde May also held almost steady atabout $18. The power offering for June was marked in the low $10s atMid-Columbia and in the low $20s elsewhere in the region.

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Marketprices and included industry data are current as of the time of publication andare subject to change. For more detailed market data, including power andnatural gasindex prices, as well as forwards and futures, visitour Commodities Pages.