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Daily power prices unravel with declining demand forecasts

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Daily power prices unravel with declining demand forecasts

Next-day power markets across the U.S. tumbled Tuesday, Oct. 10, amid forecasts for slack midweek demand but with higher spot gas prices offering support.

After notching losses the day prior, the front-month November natural gas futures contract rebounded Tuesday and closed the day up 5.8 cents at $2.891/MMBtu. Likewise, spot gas markets favored gains and gave power dailies some support.

Following the return of two reactors, total U.S. nuclear plant availability nudged to 87.41% early Oct. 10.

Eastern power markets tumble with demand forecasts

Power prices in the East took a few steps back Tuesday encouraged by outlooks for deflated midweek demand but kept in check by a rebound in spot gas prices.

At next-day markets, power prices at the New England Mass hub fell almost $20 and ranged in the mid-$30s to low $40s while PJM West trades were about $13 lower from Monday and spanned the mid- to high $30s.

Day-ahead markets in the Northeast fared no better. Deals at the Mass hub tumbled more than $25 to an average of $29.71, while trades in New York fell by $5 to $8 from Monday and noted averages of $26.15 at New York Zone A, $31.36 at New York Zone G and $37.30 at New York Zone J.

Spot gas markets helped limit losses as deals at Tetco M3 surged more than $1.50 and averaged above $2.80/MMBtu, while trades at Transco Zone 6 New York added around a penny and averaged near $2.90/MMBtu.

Grid operators in the Northeast and mid-Atlantic are calling for subdued midweek demand. Peak load in New England may reach 17,350 MW on Tuesday and 15,300 MW on Wednesday, while demand in New York should touch highs of 20,974 MW on Tuesday and 19,146 MW on Wednesday. The PJM Mid-Atlantic region should see demand crest at 40,755 MW on Tuesday and 32,770 MW on Wednesday, while load in the PJM Western region may top out at 53,226 MW on Tuesday and 48,714 MW on Wednesday.

Western power values sag; Mead trades firm with gas support

Bogged down by outlooks for sluggish midweek demand, most power markets in the Western U.S. favored losses Tuesday but with prices at select hubs, most notably Mead, staying firm with high spot gas prices.

The California ISO is expecting demand to run up to 30,919 MW on Tuesday and 29,685 MW on Wednesday. Consequently, deals at South Path-15 shed around $2 and ranged in the mid-$30s.

In the Northwest, power deals at Mid-Columbia and the California-Oregon Border fell $2 to $3 and were seen in the mid- to high $20s at the former and the high $20s at the latter.

Mixed moves defined power trading activity in the Southwest with Palo Verde transactions down roughly $3 in the mid-$20s, while Mead packages added less than a dollar and were posted in the mid- to high $20s.

Midwest markets retreat on lower load forecasts

Forecasts for declining midweek demand offset support from higher spot gas prices and fueled a downtick at daily power markets in the Midwest on Tuesday.

On-peak power prices at PJM AEP-Dayton slipped more than $5 and changed hands in the high $30s, while MISO Indiana trades were pegged in the mid-$30s, down almost $5 from Monday.

Load outlooks suggest deflated demand for the region by the midweek. The PJM AEP region may see peaks of 17,155 MW on Tuesday and 15,509 MW on Wednesday, while demand in the PJM ComEd region should hit highs of 11,532 MW on Tuesday and 11,407 MW on Wednesday.

Conflicting fundamentals leave Texas prices mixed

Following a clash of robust Wednesday demand forecasts and lower spot gas prices, day-ahead markets in Texas spent Tuesday mixed.

The Electric Reliability Council of Texas is projecting peaks of 42,470 MW on Tuesday and 43,677 MW on Wednesday.

Day-ahead markets at ERCOT Houston fell by about $6 and averaged $30.38, while trades at ERCOT South eased by roughly a dollar and averaged $27.06. Action at ERCOT North and ERCOT West was little changed from Monday and averaged $23.07 and $23.74, respectively.

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.