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AM Power Report: Dailies could vary amid easing load, advancing gas

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AM Power Report: Dailies could vary amid easing load, advancing gas

Next-day power prices could diverge Tuesday, Jan. 24, as predominantly softer demand forecasts for midweek run counter to ongoing gains at the natural gas futures arena.

Rising almost 4 cents in the previous session, front-month February natural gas futures were up another 6.5 cents overnight to $3.308/MMBtu early Tuesday amid ongoing short covering.

Alongside the continued strength in futures, day-ahead natural gas markets are likely to swing higher in many cases Tuesday, offering upside support for some power markets.

On the demand side, most grid operators across the country anticipate reduced load at midweek.

In the Northeast, demand in New England is expected to crest at 17,700 MW on Tuesday and 17,000 MW on Wednesday, while load in New York is projected to reach highs at 20,385 MW on Tuesday and 20,145 MW at midweek. Farther south, PJM Western region load is seen peaking at 54,948 MW on Tuesday and 52,501 MW on Wednesday, while PJM Mid-Atlantic demand should near 38,189 MW on Tuesday and 34,971 MW on Wednesday.

In the Midwest, demand in the PJM AEP region is called to reach 17,047 MW on Tuesday and 16,294 MW on Wednesday, while load in PJM ComEd is set to defy the wider downtrend as it is forecast to see highs at 12,781 MW on Tuesday and 13,035 MW at midweek.

In the South, ERCOT demand could touch a high near 40,288 MW on Tuesday and 38,537 MW on Wednesday. In the West, CAISO load is poised to top out at 31,150 MW on Tuesday and 30,670 MW on Wednesday.

In term activity, power values for February were mixed in the week's opening session Jan. 23, as front-month natural gas futures seesawed in trading to drive fueling costs in varied directions before ultimately ending the day with gains.

In the East, NEPOOL-Mass February gave back about 20 cents in trades done atop $60, as PJM West February shed over $1 in deals carried out at above $40. Along the forward curve, power for March was transacted in the high $40s in New England and in the high $30s at PJM West.

In the Midwest, price action for month-ahead power unraveled more than $1 at the PJM markets to average near $38 at the AD hub and atop $35 at the Northern Illinois hub, but rose by almost $2 to an index at roughly $41 at MISO Indiana. Power prices for March across the three trading locations spanned the mid- to high $30s.

In the South, gains ranging from about 10 cents to as much as $1 took power transactions for February at the ERCOT markets to indexes spread from almost $27 to $32. Meanwhile, regional trading activity for March power was likewise spotted in the high $20s to the low $30s.

In the West, California saw front-month power values hold flat at an index at roughly $35 at North Path-15 but deflate by 35 cents to average near $33 at South Path-15, as prompt-month pricing added about 60 cents to average near $28 at Mid-Columbia and climbed by almost $1 to an index close to $27 at Palo Verde. Price action for March power was pegged in the high $20s to the low $30s in California and in the low $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.