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AM Power Report: Dailies could end week choppy amid indecisive fundamentals

Price action for next-day power could end the workweek mixed Friday, Aug. 11, as traders look to varied post-weekend demand forecasts and recent volatility in natural gas futures trading.

Climbing more than 10 cents on the session Aug. 10, with the gains driven by a smaller-than-expected injection into storage reported for the week ended Aug. 4, the NYMEX September gas futures contract was trending slightly lower overnight. At 6:45 a.m. ET, front-month natural gas futures were down 0.4 cent to $2.981/MMBtu on light profit taking ahead of the weekend.

While the prior-day rally in futures could be supportive of spot natural gas price gains at some major market hubs, the inclusion of the lower-load weekend days in the trading package Friday is likely to exert counter-pressure on values.

On the demand side, forecasts indicate regional variation in load levels at the start of the next workweek on Aug. 14.

In the Northeast, load in New England is expected to peak at 18,000 MW on Friday and 18,370 MW on Aug. 14, while demand in New York is seen cresting at 22,766 MW on Friday and 23,077 MW on Aug. 14. In the Mid-Atlantic, PJM Western region load is projected to hit highs at 60,427 MW on Friday and 58,142 MW on Aug. 14, while demand in PJM Mid-Atlantic is forecast to top out at 40,478 MW on Friday and 40,208 MW on Aug. 14.

In the Midwest, load in the PJM AEP region is called to reach 18,176 MW on Friday and 17,542 MW at the start of the next business week, while PJM ComEd demand is expected to see highs at 14,883 MW on Friday and 14,410 MW on Aug. 14.

In the South, Texas load is seen touching a high near 67,938 MW on Friday and 68,137 MW on Aug. 14.

In the West, demand in California should near 39,395 MW on Friday and 37,543 MW on Aug. 12, but should find some upside support Aug. 14, as full industrial and commercial load recovers at the start of the new business week.

At the term markets, the price of power for September delivery was stronger Aug. 10, in tandem with front-month natural gas futures that extended higher on the session to ultimately signal an ongoing uptick in fueling costs.

In the East, transactions for September power added more than $1 to average above $31 in New England and atop $33 at PJM West. Along the forward curve, power deals for October were assessed in the high $20s in New England and in the low $30s at PJM West.

In the Midwest, PJM Northern Illinois September rose by 40 cents to an average close to $32, as PJM AD September and MISO Indiana September climbed by about 20 cents to indexes near $33 and $34, respectively. Power for October delivery was marked in the low $30s at the PJM hubs and in the mid- to high $30s at MISO Indiana.

In the South, gains on either side of $2 at the ERCOT markets drove price action for month-ahead power to range from $30 to $35. Regional pricing for October power was spread in the mid-$20s to the high $30s.

In the West, California saw prompt-month power values rise by about 70 cents at North Path-15 and 90 cents at South Path-15 to indexes at almost $40, while front-month power prices were bolstered also by around 70 cents to an average atop $28 at Mid-Columbia and lifted by 80 cents to an average above $30 at Palo Verde. Price activity for October power spanned the high $30s in California and the low to high $20s elsewhere in the region.

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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.