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Load, natural gas support most power dailies ahead of weekend

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Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

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

Load, natural gas support most power dailies ahead of weekend

Next-day power markets moved mostly higher to conclude the week Friday, Oct. 13, as traders looked to strong demand outlooks for the start of the new week and recent gains in natural gas futures pricing.

After advancing 10 cents in the prior session, NYMEX November natural gas futures extended gains Friday, ending the week 1.1 cents higher at $3.000/MMBtu on short covering ahead of the weekend.

In line with the recent advance in futures, day-ahead natural gas prices stepped higher in many cases Friday, although gains were limited by the inclusion of the lower-load weekend days in the trading package.

Warmer weather supports power demand, prices in East

Eastern U.S. power prices for Oct. 16 delivery swung higher Friday in line with load forecasts as conditions are expected to turn summerlike by the start of the next workweek.

"A moderate rise in humidity will accompany the warmth, further making the day feel like the calendar has flipped back to summer," Accuweather senior meteorologist Kristina Pydynowski wrote.

Deals for Oct. 16 flow were done more than $10 higher on the day in the low to mid-$40s at the New England Mass Hub, while PJM West added almost $2 to trade in the low $30s.

Day-ahead deals for Oct. 14 flow moved lower as load is called to retreat during the weekend. Mass hub averaged $46.82, while in New York, day-ahead markets ranged from averages of $25.14 at Zone A to $29.46 at Zone G and $29.93 at Zone J.

Looking to the start of the next workweek, demand in New England is poised to hit 14,900 MW on Oct. 16, more than 700 MW above Friday's peak, while load in New York is called to top out at 18,530 MW on Oct. 16, about even to Friday's level.

Demand in the Western region of PJM is expected to peak at 46,600 MW by Oct. 16, while load in the PJM Mid-Atlantic region should hit 31,800 MW, both fairly steady to Friday.

West markets pop higher with post-weekend load rebound

Power prices in the western U.S. moved higher Friday as traders looked to advancing load behind the weekend.

In California, South Path deals for Oct. 16 jumped more than $10 with action in the upper $40s. Load in California is seen reaching highs of 28,725 MW on Friday and 27,710 MW on Saturday before likely swinging higher by Oct. 16.

In the Northwest, Mid-Columbia traded in the high $20s, while deals at the California-Oregon Border hub were done in the low $30s, each up $3 to $4 on the day.

In the Southwest, both Palo Verde and Mead saw dailies in the low $30s, up $6 to $7 on the day.

ERCOT dailies slump ahead of cold front

The price of power traded at Texas markets Friday brought a mixed bag as day-ahead deals for Saturday held strong with lingering heat and humidity but with deals for Oct. 16 tumbling with demand forecasts as a cold front moves across the state.

After trading well into the $30s and even above $40 at some locations Oct. 12, most next-day deals in the Electric Reliability Council of Texas pulled lower with demand forecasts. Demand is poised to reach a high of 42,713 MW on Oct. 16, down more than 15,000 MW from Friday's projected high.

However, day-ahead prices held strong considering the lower-demand weekday load covered by the Saturday product. ERCOT Houston remained at a premium average of $37.73 followed by ERCOT South at $30.95 and ERCOT West and ERCOT North at $26.57 and $26.12, respectively.

Texas will be hot and humid through Saturday before another strong cold front moves southeast through ERCOT between Saturday and Sunday, ERCOT meteorologist Chris Coleman wrote in an Oct. 13 report. "Much cooler and less humid behind the front. Below-normal temperatures for the first-half of next week," he said.

Midwest markets ease in quiet trade

Power prices in the Midwest slumped Friday amid soft demand forecasts and muted natural gas prices.

With next-day markets for Oct. 16 trading on either side of $30, day-ahead deals for Oct. 14 delivery were softer amid slack weekend demand being covered. Day-ahead deals averaged $30.47 at the AEP-Dayton hub and $27.06 at the Northern Illinois hub.

Peak demand in the AEP region is called to retreat almost 300 MW to a high of 14,230 MW on Oct. 16, while load in the ComEd region near Chicago should top out around 11,140 MW on Oct. 16, about 200 MW below Friday's forecast high.

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.