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AM Power Report: Dailies could find pressure in declining gas

activity for next-day powerdelivery could be varied with a downside bias Wednesday, Sept. 28, as jumbled demandprojections for the latter part of the workweek combine with ongoing weakness atthe natural gas futures complex.

Endingjust 0.1-cent lower inthe previous session, October natural gas futures were extending tothe downside ahead of the opening bell early Wednesday on profit-taking. The contract,which rolls off the board at the close of business Wednesday afternoon, was seenmost recently down 4.4. cents to $2.952/MMBtu. November natural gas futures werepegged last at $3.004/MMBtu, down 4.6 cents early Wednesday.

In tandemwith any sustained softness in the futures arena at midweek, spot natural gas marketsare likely to leak lower, offering pressure to daily power prices in many areasof the country.

On thedemand side, load outlooks for the latter part of the workweek are mixed.

In theNortheast, load projections are aimed lower, as demand in New England is seen peakingat 15,490 MW on Wednesday and 15,340 MW on Thursday, while load in New York is calledto reach 19,693 MW on Wednesday and 19,171 MW on Thursday. Farther south, PJM Westernregion demand is poised to rise as it is forecast to hit highs at 47,294 MW on Wednesdayand 47,659 MW on Thursday, while PJM Mid-Atlantic load is set to decline as it isexpected to touch a high near 33,429 MW on Wednesday and 32,723 MW on Thursday.

In theMidwest, firm to stronger load is in store, as demand in PJM AEP region is projectedto top out at 14,681 MW on Wednesday and 14,711 MW in the latter part of the workweek,while load in PJM ComEd is forecast to see highs at 11,422 MW on Wednesday and 11,744MW on Thursday.

In theSouth, load in ERCOT will likely crest at 51,813 MW on Wednesday and 48,256 MW inthe latter part of the business week, joining the downtrend. In theWest, CAISO demand should near 37,403 MW on Wednesday and 35,214 MW on Thursday.

In termtrading, power values for October were mixed but predominantly softer Sept. 27,as front-month natural gas futures moved to shallow negative territory on the sessionto signal some reduction in fueling costs.

In theEast, losses on either side of $2 took price activity for October power to indexesat near $29 at NEPOOL-Mass and at almost $34 at PJM West, as pricing for Novemberpower at the two hubs spanned the low to mid-$30s.

In theMidwest, front-month power transactions shed about $2 to average at above $33 atPJM AD and deflated by near $1 to an index atop $32 at PJM Northern Illinois, assimilar deals at MISO Indiana unraveled around 80 cents on the day to average atover $34. Along the forward curve, power trades for November were similarly carriedout in the low $30s overall.

In theSouth, power parcels for October at the ERCOT markets defied the dominant declineby adding about 20 cents to as much as 50 cents in trades averaging roughly between$29 and $33, while power products for delivery in November in the region were likewisetransacted in the high $20s to the low $30s.

In theWest, California saw month-ahead power prices fall by almost $2 to an index at roughly$37 at North Path-15 and recoil by around 90 cents to average at above $35 at SouthPath-15, as Mid-Columbia October slumped by 20 cents in deals done atop $24 andPalo Verde October gave back over $1 in trades carried out at more than $27. Powervalues for November were pegged also in the mid- to high $30s in California andin the high $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 gas indexprices, as well as forwards and futures, visitour Commodities Pages.