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Spot gas gains support US power dailies midweek


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Spot gas gains support US power dailies midweek

Next-day power values across the U.S. chopped around againWednesday, May 4, as dailies reflected expectations of mostly softer Thursday demandand support from higher spot natural gas prices.

After a round of cautioustrading overnight, the front-month June natural gas futures contractclosed the midweek session up 5.5 cents at $2.141/MMBtu. Following gains in futuresspot natural gas markets continued to move higher.

In other supply, total U.S. nuclear plant availability dipped to its lowest daily capacityfactor yet this spring to 81.61% early May 4, down from 82.39% on May 3 and stillbelow the 83.17% level noted on the same day in 2015.

East dailiessupported by gas but held back by demand

Next-day power products in the eastern U.S. were flat toslightly higher Wednesday, as an uptick in spot natural gas prices was able to offsetpressures from mixed to ultimately weaker Thursday load outlooks.

In the Northeast, next-day deals at NEPOOL-Mass were donein the low to mid-$30s, up from a prior-day index of $30.25, while in the Mid-Atlantic,trades at PJM West were pegged in the high $20s, losing less than a dollar on thesession.

Day-ahead markets in the Northeast favored losses, withDAM deals at NEPOOL-Mass, New York Zone A and New York Zone G slipping by about$1 to $3 from Tuesday to post averages of $29.17, $27.48 and $27.33, respectively,while DAM trades at New York Zone J shed less than a dollar and averaged $29.90.

Spot gas markets embraced gains with gas deals at TETCO-M3and Transco Zone 6 New York each adding more than 10 cents to rise to averages above$1.85/MMBtu and $1.95/MMBtu, respectively.

Grid operators in the Northeast project declining demandduring the latter part of the workweek, as peak load in New England should reach14,310 MW on Thursday, shedding 70 MW from Wednesday, while demand in New York islikely to crest at 17,289 MW on Thursday, tumbling by more than 500 MW from themidweek.

PJM regions in the Mid-Atlantic anticipate varied load.The PJM Mid-Atlantic region predicts demand to top out at 30,216 MW on Thursday,down by around 700 MW from Wednesday, while load in the PJM Western region couldhit 45,991 MW on Thursday, up close to 800 MW from the day prior.

Midwestmarkets post muted moves

Power packages in the Midwest eased Wednesday, as dailieswere depressed by forecasts of varied midweek load but were supported due to a risein spot natural gas prices. MISO Indiana saw most of the session's action, withpower values easing from Tuesday and pegged in a range spanning the low $30s.

PJM regions in the Midwest expect choppy demand, with thePJM AEP region projecting a Thursday high at 14,558 MW, up by about 100 MW fromWednesday, while load in the PJM ComEd region should touch 10,988 MW on Thursday,shedding little more than 20 MW from the midweek.

Supporting dailies in the region was a modest increasein spot natural gas prices. Gas deals at Chicago Citygates and NNG Demarc added1 cent to 2 cents from Tuesday to post averages above $2.05/MMBtu and around $2.00/MMBtu,respectively.

Texasdailies boosted by stronger load, rising gas

Power parcels in Texas rebounded from the prior day's lacklustershowing Wednesday, as dailies derived support from forecasts for stronger Thursdaydemand and higher spot natural gas prices.

ERCOT expects demand to run up to 44,779 MW on Thursday,up by more than 1,700 MW from Wednesday. Encouraged by load, next-day deals at ERCOTNorth added more than a dollar and were heard in the low to mid-$20s.

Day-ahead markets also saw gains of around a dollar withERCOT Houston, ERCOT North, ERCOT South and ERCOT West reporting averages of $23.13,$23.07, $23.03 and $22.78, respectively.

Spot gas markets ticked higher again, with the Henry Hubadding more than 5 cents to average near $2.00/MMBtu, while gas at El Paso Permiangained close to 4 cents from Tuesday to average above $1.90/MMBtu.

West dailiesmixed amid conflicting fundamentals

Price activity in the western U.S. moved in different directionsWednesday, owing to diverging signals from forecasts suggesting softer Tuesday demandand support coming from ongoing gains in spot natural gas markets.

The California ISO estimates that Thursday demand may peakat 28,315 MW, down by around 800 MW from Wednesday. Bogged down by slack load, next-daydeals in California leaned flat to lower. Trades at North Path-15 tumbled by about$4 in the low $20s, while transactions at South Path-15 shed less than a dollarin the low to mid-$20s.

In the Southwest, power dailies were mixed. Power for Thursdaydelivery at Palo Verde slipped by more than a dollar in the low to mid-$20s, whiledeals at Mead added more than $2 and were exchanged in the mid-$20s.

Muted moves dominated hubs in the Northwest, with Mid-Columbiaeasing from Tuesday in the mid- to high teens, while COB transactions were steadyto the day prior in the low $20s.

Supporting varied power parcels were advances in regionalspot gas markets. Gas deals at Malin and SoCal Border were about 3 cents to 4 centshigher from Tuesday to post averages above $1.95/MMBtu and close to $2.00/MMBtu,respectively, while trades at PG&E Citygates gained more than 5 cents and averagedabove $2.10/MMBtu.

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