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Power dailies nudge higher with natural gas, post-holiday load recovery

Power prices at the daily markets ticked higher Tuesday, Dec. 27, coming off the long Christmas holiday weekend amid higher demand prospects and recent gains at the natural gas markets.

After rallying 12.4 cents in the Dec. 23 session, January 2017 natural gas futures added another 9.9 cents to end the first session of the new workweek at $3.761/MMBtu, the highest settlement for a front-month contract in more than two years.

On the demand side, outlooks suggest predominantly stronger load as the holiday-shortened workweek unfolds.

Northeast prices underpinned by demand

While volumes remained fairly light, power prices in the eastern U.S. opened the new workweek with a modest advance as demand begins to recover and natural gas values push higher.

PJM West saw the most activity in next-day trade with deals for Wednesday flow pegged in the high $20s and low $30s, up about $1 on the day. Day-ahead markets also advanced with NEPOOL Mass hub rising to an average DAM price of $53.08. In New York, day-ahead markets were up anywhere from $1 to more than $5 to averages of $26.91 at Zone A, $48.17 at Zone G and $48.46 at Zone J.

Demand in New England should hit 17,400 MW on Wednesday, about 400 MW above Tuesday's projected peak, while load in New York is projected to reach 20,982 MW on Wednesday, down almost 200 MW. Farther south, PJM Western region load is seen peaking at 54,458 MW on Wednesday, up 1,200 MW on the day, while PJM Mid-Atlantic demand should peak at 37,564 MW on Wednesday, up almost 3,500 MW on the day.

Spot gas markets also offered power dailies a lift higher with Transco Zone 6 New York surging more than 30 cents to an index near $3.60/MMBtu while Algonquin Citygate jumped more than 80 cents to an index near $5.90/MMBtu.

ERCOT dailies rebound after long weekend

Supported by a stronger load outlook as colder weather returns to Texas, the price of power at ERCOT markets was on the move higher Tuesday.

ERCOT North saw next-day electricity change hands in the high $20s, up about $4 on the day, with similar gains seen at the day-ahead markets. Average DAMs ranged from $26.51 at ERCOT North and $26.76 at ERCOT West to $28.48 at ERCOT South and $30.62 at ERCOT Houston.

ERCOT demand could hit 41,467 MW on Wednesday, up more than 1,700 MW on the day.

Regional spot gas markets were up 5 cents to 10 cents, putting El Paso Permian near $3.40/MMBtu and Henry Hub at just below $3.70/MMBtu.

Midwest markets step back in thin trade

Power prices in the Midwest steered mostly lower in thin trade Tuesday despite rising demand at most major load pockets.

MISO Indiana saw the most activity with a next-day market pegged in the low $30s, off almost $4 from pre-weekend levels.

Demand in the PJM AEP region is called to reach 16,535 MW on Wednesday, up 500 MW on the day, while peak load in PJM ComEd is poised to hold steady near 13,000 MW on Wednesday.

In spot gas trading, Chicago deals were up 5 cents on the day to an index just below $3.60/MMBtu.

West markets mixed as demand weakens

Following a week of revised trading schedules in advance of the Christmas holiday and with more revised trade to be seen later this week ahead of the New Year's holiday and the change in months, power markets in the western U.S. were mixed Tuesday.

In the Northwest, Mid-Columbia was up $2 to an index in the high $20s, still about $1 below COB, which was flat on the day and also reported in the high $20s.

To the south, Palo Verde and Mead each slipped less than $1 lower to indexes in the upper $20s, but with Mead averaging about $1.50 above Palo Verde.

In California, CAISO load could top out at 28,898 MW on Wednesday, off almost 800 MW on the day. But offering meager support were small spot gas gains, with both Malin and SoCal Citygate up about 5 cents to indexes near $3.60/MMBtu.

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.