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Cold blast drives Northeast power dailies to 22-month highs

Despite big gains in the Northeast, power markets across the U.S. moved in different directions Thursday, Dec. 15, as traders took into account mostly lower Friday demand forecasts and mixed spot natural gas prices.

Running counter to reports of a 147-Bcf net withdrawal during the week ended Dec. 9, which was above consensus estimates and historical averages, the front-month January 2017 natural gas futures contract closed the day down 10.6 cents at $3.434/MMBtu. Across spot gas markets, packages for Friday delivery rose in the West and Texas but fell in the East and Midwest.

Looking ahead into winter, the National Oceanic and Atmospheric Administration forecasts that weak La Niña conditions should continue to linger over the next few months, extending through the winter of 2017 in the northern hemisphere.

Northeast dailies rise to 22-month highs; PJM West flounders

Dailies in the East moved mixed Thursday, with hubs in the Northeast rising to 22-month highs despite outlooks calling for mostly subdued demand and a downtick in regional spot gas prices.

In next-day trading, NEPOOL-Mass and New York Zone G saw gains of more than $10, with power exchanged in the high $90s and low $110s and low $100s, respectively. Dailies at PJM West, on the other hand, fell more than $10 and spanned the low $50s to low $60s.

Northeastern day-ahead markets also moved higher. DAMs in New York Zone A and New York Zone G added roughly $15 from midweek and averaged $56.56 and $101.07, respectively, while New York Zone J jumped by about $25 on the session and averaged $120.50. DAMs at NEPOOL-Mass continued the trend and traded around $3 higher to average $100.04.

Keeping gains in check was a drop in spot gas prices. Transco Zone 6 New York fell by more than $12 to average below $8/MMBtu, while gas deals at TETCO-M3 stumbled by more than $4.50 to average near $4/MMBtu. Trades at Algonquin Citygates were roughly $2 lower from midweek and averaged near $10.50/MMBtu.

Grid operators in the Northeast anticipate varied demand. Peak Friday load in New England could touch 20,200 MW, up 700 MW from Thursday, while demand in New York may reach 22,109 MW on Friday, down 455 MW from the day prior.

Mid-Atlantic load forecasts are aimed lower with the PJM Mid-Atlantic region called to see a Friday high near 43,345 MW, down 1,180 MW from Thursday, while the PJM Western region could see demand hit 65,854 MW on Friday, falling more than 2,700 MW from the previous day.

Northwest, Southwest dailies biased higher; Calif. values retreat

Pressures from typically lower weekend demand and slack Friday load outlooks associated with next-day schedule revisions failed to keep most power markets in the West from notching gains on Thursday with marginally higher spot gas prices offering support.

Gains of roughly $8 were seen in the Northwest, with Mid-Columbia seeing power exchanged in the low $40s to high $50s, while power at COB changed hands in the low $50s. Southwest markets added less than $1 on the session with deals spanning the high $20s to low $30s at Palo Verde and the low $30s at Mead. Defying the trend were transactions at South Path-15, which slipped by almost $4 in the high $30s to low $40s.

Friday demand in California should peak near 29,537 MW, down more than 600 MW from Thursday.

Midwest markets ease on choppy load, slack gas prices

Little support from mixed Friday load forecasts and lower regional spot gas prices led power values in the Midwest lower Thursday. Noting most of the session's action were on-peak trades at MISO Indiana, which shed roughly $2 in the low to mid-$50s.

Regional load outlooks are pointed in different directions. Demand in the PJM AEP region may top out at 22,228 MW on Friday, up 185 MW from Thursday, while load in the PJM ComEd region should crest at 14,670 MW on Friday, down more than 600 MW from Thursday.

Texas DAMs fall on sluggish load outlooks

Deflated Friday demand forecasts fueled day-ahead market losses in Texas on Thursday but with modestly higher regional spot gas prices helping to mitigate the downtick.

Load in Texas could run up to 40,635 MW on Friday, down more than 1,600 MW from Thursday.

Pressured by weak demand forecasts, day-ahead markets tumbled. DAMs at ERCOT North, ERCOT South and ERCOT West fell by around $4 to $7 on the session to averages of $21.90, $23.76 and $20.24, respectively, while DAMs at ERCOT Houston shed almost $2 and averaged $26.58.

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.