Next-day power prices were mixed to mostly higher Tuesday, Dec. 26, as traders looked to generally stronger demand forecasts for midweek and gains for natural gas markets.
Although spending much of the day in positive ground, NYMEX January 2018 natural gas futures ended Tuesday in the red. The front-month contract settled at $2.643/MMBtu, down 2.4 cents ahead of the Wednesday afternoon expiration of the contract.
In line with prior-session gains in gas futures, day-ahead natural gas markets climbed at the major U.S. consuming hubs, drawing upside traction from weather-related demand support in many cases.
Northeast power prices soar on ongoing cold weather, rising demand
Next-day power prices in the Northeast continued to spike Tuesday, with the ongoing rally sparked by an anticipated upswing in load at midweek and a concurrent surge in regional gas values.
In New England, on-peak power at the NEPOOL-Mass hub was priced in the low $170s to low $200s, soaring around $80 from the low $100s on Dec. 22. In the Mid-Atlantic, deals at the PJM West hub traded in the mid-$50s to upper $70s, climbing more than $30 on the day.
After rising more than $6.00/MMBtu in the Dec. 22 session, cash gas at the Algonquin market surged more than $30/MMBtu on Tuesday to an index around $52.00/MMBtu, amid restricted operations due to nominations exceeding pipeline capacity.
Day-ahead market prices for Wednesday also rose sharply, coming in at $139.45 at NEPOOL-Mass, $43.42 at New York's Zone A, $77.69 at Zone G and $78.73 at Zone J.
New England demand is seen reaching 19,200 MW on Wednesday, up 500 MW from Tuesday, while New York load is likely to hit a high at 22,400 MW on Wednesday, increasing 200 MW from Tuesday.
In the Mid-Atlantic, PJM Western region load is likely to top out near 64,800 MW on Wednesday, increasing about 2,500 MW from Tuesday. Load in the PJM Mid-Atlantic region is expected to crest at 41,500 MW on Wednesday, up about 1,300 MW from a day earlier.
ERCOT day-ahead power markets swing higher with anticipated demand surge
Increasing gas prices and an expected uptick in demand worked to lift day-ahead market prices in Texas by $5 to $6 from Dec. 22.
DAM prices for Wednesday posted averages at $25.01 at ERCOT Houston, $25.62 at ERCOT North, $25.89 at ERCOT West and $26.04 at ERCOT South.
Texas demand is projected to peak at 49,900 MW on Wednesday, soaring about 5,000 MW from Tuesday.
Gas prices in the south-central U.S. advanced, which worked to support the uptick in power markets. Spot gas at the Henry Hub was inked at an index at $2.70/MMBtu, gaining 10 cents.
Firm demand outlook, gas boosts Midwest power markets
Power prices in the central U.S. jumped in value upon the return from the extended holiday weekend, with an expected firmness in demand working to boost values. On-peak power at the Indiana hub was priced in the high $30s, rising about $4 on the day.
PJM AEP load is anticipated to reach 20,500 MW on Wednesday, up about 1,000 MW from Tuesday. Demand in the PJM ComEd region near Chicago is likely to top out near 14,600 MW on both Tuesday and Wednesday.
Regional gas prices also shifted higher Tuesday, offering upside support for power markets. Chicago natural gas for Wednesday flow was seen at $2.90/MMBtu, increasing 25 cents.
West Coast power prices ease amid expected drop in demand
With demand expected to drop at midweek, West Coast next-day power prices stumbled in value.
In California at South Path 15, heavy-load power deals were reported in the high $30s to low $40s, down a few dollars.
Demand in California is anticipated to decline at midweek, which worked to weigh on regional power prices. Load is seen peaking at 28,480 MW on Wednesday, faltering 1,360 MW from the day prior, according to the California ISO.
Power at the California-Oregon Border was marked in the upper $20s, down about $3 from the low $30s on Dec. 22. Light-load power at COB was assessed in the mid-$20s.
Heavy-load power at the Mid-Columbia market was inked in the high $20s, easing from a level in the upper $20s to low $30s previously. Light-load power deals at Mid-C ran in the low $20s to mid-$20s.
Palo Verde heavy-load power was priced across the $20s, with Mead heavy-load packages reported in the low $30s, declining $2 to $3 on average. Light-load power at both markets traded in the mid- to upper $20s.
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.