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AM Power Report: Dailies could dwindle amid overridingly bearish fundamentals

Day-ahead power pricing could unravel Wednesday, Oct. 18, as mostly softer demand prospects for the latter part of the workweek conspire with renewed losses in natural gas futures trading.

Ending the prior session 1.6 cents higher, NYMEX November natural gas futures were moving lower early Wednesday. At 7:05 am ET, the front-month gas futures contract was down 5.7 cents to trade near $2.905/MMBtu on profit-taking and fresh selling ahead of the Thursday release of the latest weekly natural gas storage report.

The U.S. Energy Information Administration detailed a net 87-Bcf injection into natural gas storage for the week ended Oct. 6, with market outlooks for the report for the week ended Oct. 14 spanning an injection somewhere in the 50s Bcf. The figure will compare to a five-year-average injection of 78 Bcf and the 77-Bcf injection reported in the same week in 2016.

Next-day gas prices at the major consuming hubs are likely to fall in line with the day's ultimate fate for the futures market.

Looking at demand, load projections for the latter part of the workweek are mostly pointed lower.

In the Northeast, load in New England could top out at 14,950 MW on Wednesday and 14,850 MW on Thursday, while load in New York should near 18,225 MW on Wednesday and 18,034 MW on Thursday. To the south, PJM Western region demand will likely hit highs at 46,467 MW on Wednesday and 46,267 MW on Thursday, while PJM Mid-Atlantic load is forecast to see highs at 30,563 MW on Wednesday and 30,399 MW on Thursday.

In the Midwest, the PJM grid operator sees demand in the AEP region cresting at 14,599 MW on Wednesday and 14,041 MW on Thursday, while load in PJM ComEd is forecast to show a modest uptick against the wider decline as it is called to reach 11,355 MW on Wednesday and 11,383 MW on Thursday.

In the South, demand in Texas will likely reach highs at 44,591 MW on Wednesday and 47,488 MW in the latter part of the business week, also defying the dominant downtrend.

In the West, load in California could peak at 32,070 MW on Wednesday and 30,560 MW on Thursday.

In term action, the price of power for November delivery predominantly favored the upside Oct. 17, in tandem with front-month natural gas futures that advanced on the session to signal an uptick in fueling costs.

In the East, November power deals shed about 50 cents against the dominant uptrend to average near $35 in New England but rose by almost 80 cents to an index above $33 at PJM West. Farther along the forward curve, power trades for December were done in the mid- to high $50s in New England and in the high $30s at PJM West.

In the Midwest, prompt-month power values climbed roughly 30 cents to an average around $34 at PJM AD and advanced by approximately 20 cents to an index close to $31 at PJM Northern Illinois. MISO Indiana front-month pricing ascended by nearly 60 cents to an average at about $35. December power prices spanned the low to high $30s overall.

In the South, gains of about 40 cents to almost $2 at the ERCOT markets steered price activity for November power to indexes ranging from $22 to $31. Regional pricing for December power delivery was likewise spread in the low $20s to the low $30s.

In the West, California saw month-ahead power transactions add about $2 to average atop $41 at North Path-15 and near $40 at South Path-15, while similar trades were bolstered by roughly 40 cents to an index above $25 at Mid-Columbia and were lifted by $2 to an index above $29 at Palo Verde. Power deals for December were carried out in the low $40s in California and in the high $20s to the low $30s 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.