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US power markets stumble midweek

Outlooks calling for declining demand alongside mostly lower spot natural gas prices provided little support to next-day power values across the country Wednesday, Jan. 18.

In gas futures trading, scant prior-day losses extended Wednesday as the front-month February contract dropped 11.0 cents to settle at $3.302/MMBtu. Following the retreat in futures and predominantly subdued demand forecasts, most spot gas markets also ticked lower.

According to AccuWeather.com, "warmth will continue to build over much of the eastern United States into next week, ahead of what could be a major snowstorm for parts of the Central states."

East markets flounder on cheap gas, slack demand

Forecasts of sluggish Thursday demand and lower spot gas prices kept power values in the East pointed mostly lower Wednesday.

At next-day markets, power at NEPOOL-Mass was traded about a dollar lower in the low to mid-$30s, while PJM West trades were flat to Tuesday and were done in the low $30s.

Day-ahead markets also posted losses. DAMs in New York shed $1 to $2 from Tuesday and noted averages of $34.01 at New York Zone A, $36.69 at New York Zone G and $37.48 at New York Zone J. DAMs at NEPOOL-Mass saw little change from the day prior and averaged $33.68.

Demand is set to fall in both the Northeast and mid-Atlantic. Load in New England could crest at 17,600 MW on Wednesday and 16,880 MW on Thursday, while demand in New York may top out at 20,319 MW on Wednesday and 20,055 MW on Thursday. The PJM Mid-Atlantic region is forecast to see highs of 36,052 MW on Wednesday and 35,320 MW on Thursday, while the PJM Western region may see peaks of 54,813 MW on Wednesday and 52,601 MW on Thursday.

Midwest dailies slip amid fundamental pressures

Conflicting cues due to varied load forecasts and mixed spot gas prices pressured power values lower in the Midwest on Wednesday. Noting most of the session's action were deals at MISO Indiana where power was traded in the low $30s, down around a dollar from Tuesday.

Regional load forecasts are aimed lower. The PJM AEP region should see demand reach highs of 16,484 MW on Wednesday and 16,497 MW on Thursday, while the PJM ComEd region could see peaks of 13,145 MW on Wednesday and 12,649 MW on Thursday.

ERCOT values retreat on demand outlooks

Expectations of retreating Thursday demand sent values in Texas stumbling Wednesday with mixed spot gas prices offering little support.

Next-day power at ERCOT North changed hands in the low $20s, down from a Tuesday index of $25.75.

Regional day-ahead markets also held a downward bias. Losses of $4 to $5 were seen at ERCOT North and ERCOT West, which averaged $20.14 and $19.29, respectively, while ERCOT South traded day-ahead power about a dollar lower at an average of $25.35. Defying the trend were DAMs at ERCOT Houston, which added roughly $3 and averaged $31.94.

ERCOT is calling for load to run up to 39,516 MW on Wednesday and 38,437 MW on Thursday.

California, Northwest markets favor losses; Southwest dailies firm

Losses for regional spot gas prices worked to offset forecasts for elevated Thursday demand and kept most markets in the West, excluding those in the Southwest, embracing the downside on Wednesday.

On-peak power prices in the Northwest slipped by $1 to $2 from Tuesday and ranged in the mid- to high $20s at Mid-Columbia and the high $20s at COB. Dailies in California eased by less than $1, with deals done in the mid-$30s at both North Path-15 and South Path-15. Running counter to the trend were southwestern markets, as Palo Verde trades added about a dollar in the mid- to high $20s and Mead transactions were steady to Tuesday in the high $20s.

Load in California may see highs of 29,739 MW on Wednesday and 30,512 MW on Thursday.

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.