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East, Midwest power markets retreat; Texas, West dailies move higher

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


East, Midwest power markets retreat; Texas, West dailies move higher

Next-day power prices across major U.S. markets weremixed Tuesday, April 26, as values at some hubs ignored downward pressures fromlower midweek demand outlooks and losses at spot natural gas markets.

After posting ascant loss earlier in the day, the front-month May natural gasfutures contract closed its penultimate session as the lead down 3.1 cents tosettle at $2.032/MMBtu. The soon-to-be-front-month June contract ended the daydown 2.8 cents at $2.159/MMBtu. Following losses in the futures arena, mostspot natural gas markets also moved lower.

In other supply, total U.S. moved loweragain early April 26 to 83.41%, down from 83.94% on April 25 but still muchhigher than the 81.72% recorded on the same day last year.

In a recent weather forecast, AccuWeather.com said theMid-Atlantic states may see chilly air pushing into the region around themiddle of the week that should cut "temperatures back to levels morecommon of March than late April." As a result, a bump higher in heatingdemand could be possible.

Looking at load, most regions across the nation expectsofter midweek demand with only outlooks in Texas and the PJM ComEd region goingthe other way.

Eastdailies sag amid lack of fundamental support

Trading activity in the East was tethered to thedownside Tuesday, with losses driven by expectations of weak midweek demand anda retreat in spot natural gas prices.

Next-day deals at New York Zone A and PJM West shed $8to $9 from Monday and were done in the low $20s at the former and the high $20sat the latter, while power at New York Zone G was traded at a daily loss ofmore than a dollar in a range spanning the low to mid-$30s. Transactions atNEPOOL-Mass were flat to Monday with an index posted in the low $30s.

Day-ahead markets in the Northeast favored thedownside as well, with NEPOOL-Mass, New York Zone G and New York Zone Jshedding $2 to $4 from Monday to post averages of $35.28, $29.95 and $36.24,respectively, while DAM deals at New York Zone A stumbled by roughly $9 to anaverage of $22.89.

Spot gas markets ticked lower, with gas trades atTETCO-M3 slipping by about 2 cents to average below $1.45/MMBtu, andtransactions at Transco Zone 6 New York down more than 5 cents to also averagebelow $1.45/MMBtu.

Midweek load in the Northeast and Mid-Atlantic isexpected to decline, with demand in New England projected to reach 14,500 MW onWednesday, down 550 MW from Tuesday, while load in New York may touch 17,600 MWon Wednesday, dropping about 700 MW from the prior day. The PJMMid-Atlantic region predicts load to hit 30,631 MW on Wednesday, down by about900 MW from Tuesday, while demand in the PJM Western region should top out at46,558 MW at midweek, about 1,500 MW lower than Tuesday's projected high.

Midwestmarkets notch losses with varied demand, easing gas prices

Power packages in the Midwest lost some value Tuesday,as dailies reflected pressures from soft spot natural gas prices and limitedsupport from mixed midweek load forecasts. Most of the session's action wasfocused at MISO Indiana, where power changed hands in the low to mid-$30s, downby about a dollar from Monday.

PJM regions in the Midwest anticipate varied demand,with peak Wednesday load in the PJM AEP region potentially running up to 14,858MW, down about 900 MW from Tuesday, while demand in the PJM ComEd region shouldpeak at 11,276 MW on Wednesday, up by almost 400 MW from the day prior.

Spot gas markets favored losses and left dailiesunsupported. Gas deals at Chicago Citygates and NNG Demarc shed 4 cents to 6cents from Monday to drop to averages near $1.90/MMBtu and below $1.85/MMBtu,respectively.

Cheapgas keeps ERCOT dailies in check

Next-day power products in Texas added a modestpremium Tuesday, with the demand-driven uptick partially mitigated by lowerspot natural gas prices.

ERCOT projects Wednesday load to crest at 51,813 MW,up by more than 1,300 MW from Tuesday. Inspired by demand, next-day deals at ERCOTNorth added more than $5 and were heard in the high $20s to the low $30s.

Day-ahead markets also moved higher amid load support,with most hubs adding more than $10 to post averages of $36.79 at ERCOTHouston, $33.34 at ERCOT North, $36.16 at ERCOT South and $33.09 at ERCOT West.

Spot gas markets floundered, with gas deals at El PasoPermian and the Henry Hub falling by more than 10 cents to averages below$1.70/MMBtu and below $1.90/MMBtu, respectively.

MostWest dailies firm despite weaker load, lower gas prices

Power markets in the West held a slight upward biasTuesday, as dailies waved off forecasts calling for softer midweek demand and alack of support from falling spot natural gas prices.

In the Southwest, power deals at Palo Verde and Meadadded about $2 from Monday and were done in the high teens and low $20s at theformer and the low $20s at the latter. In the Northwest, power trades atMid-Columbia were up by about a dollar in the low to mid-teens whiletransactions at COB gained less than a dollar in the mid- to high teens.

Dailies in California leaned mixed to higher, withSouth Path-15 easing on the session in the mid- to high teens, while power atNorth Path-15 posted a daily increase of about $3 in the low $20s.

Regional spot gas markets embraced losses, with gastrades at Malin and SoCal Border falling by more than 10 cents to post averagesbelow $1.75/MMBtu and below $1.80/MMBtu, respectively, while transactions atPG&E Citygates limited the downside to close to 3 cents to average around$2.05/MMBtu.

Market prices and included industry data are currentas of the time of publication and are subject to change. For more detailedmarket data, including power,natural gas andcoal index prices, as well asforwards andfutures, visit our Commodities Pages.