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Sagging gas prices keep US power dailies biased lower


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Sagging gas prices keep US power dailies biased lower

A lack of support from falling spot natural gas prices and mixed to lower demand forecasts continued to pull down next-day power values around the country on Tuesday, Jan. 31.

In gas futures trading, the front-month March contract extended early losses owing to ongoing fundamental weakness and closed the session at $3.117/MMBtu, down 11.5 cents. Likewise, spot natural gas markets nationwide swung lower and failed to prop up power dailies.

According to the National Weather Service, "a wet and windy Pacific storm will interact with arctic air in western Oregon and southwest Washington to produce a wintry mix of snow and ice in the lower elevations this week."

Texas dailies ease on waning demand, declining gas

Expectations of subdued midweek demand and a reduction in regional spot natural gas prices kept next-day power packages in Texas tethered to the downside Tuesday.

Demand in Texas may run up to 39,330 MW on Tuesday and 39,089 MW on Wednesday. Owing to potentially slack demand, next-day trades at ERCOT North eased by less than $1 and ranged in the low $20s.

Conversely, day-ahead markets ran the other way of their next-day counterparts. DAMs at ERCOT Houston rose by roughly $4 from Monday and averaged $30.37 while power at ERCOT South added close to $2 and averaged $26.91. DAMs at ERCOT North and ERCOT West saw marginal increases of less than $1 and averaged $23.88 and $24.25, respectively.

Most West markets notch losses; South Path-15 deals firm

Excluding deals done at South Path-15, on-peak power packages in the West leaned mixed to ultimately lower on Tuesday as falling spot natural gas prices countered increased heating demand brought about by cold weather.

Up in the Northwest, heavy-load transactions at Mid-Columbia and COB shed about $1 from Monday with both ranging in the high $20s to low $30s. Hubs in the Southwest eased by less than $1 from the day prior with deals done in the low to mid-$20s at Palo Verde and the mid-$20s at Mead. Mixed but mostly muted moves were seen in California with North Path-15 easing in the mid-$30s while trades at South Path-15 were steady to Monday in the low $30s.

The California ISO is expecting demand to crest at 29,675 MW on Tuesday and 30,195 MW on Wednesday.

East dailies wane amid weak fundamentals

Predominantly lower load forecasts and decreasing spot natural gas prices sent power values in the East tumbling Tuesday.

At next-day markets, power at NEPOOL-Mass ranged in the high $30s, dropping from a Monday index of $47.00 while on-peak trades at PJM West lost close to $2 and spanned the high $20s.

Northeastern day-ahead markets also sagged. Day-ahead transactions at NEPOOL-Mass, New York Zone G and New York Zone J fell by around $8 to $9 from Monday and averaged $37.22, $35.96 and $36.21, respectively, while power at New York Zone A shed roughly $6 and averaged $27.39.

Midweek load forecasts in the Northeast are aimed lower. Demand in New England is poised to touch highs of 18,050 MW on Tuesday and 17,350 MW on Wednesday while load in New York may reach peaks of 21,192 MW on Tuesday and 20,542 MW on Wednesday.

Demand in the mid-Atlantic is expected to diverge. The PJM Mid-Atlantic region forecast highs of 38,414 MW on Tuesday and 36,336 MW on Wednesday while peak demand in the PJM Western region could near 56,236 MW on Tuesday and 56,460 MW on Wednesday.

Midwest dailies pressured by choppy demand, slack gas prices

Power dailies in the Midwest saw little support from varied demand outlooks and stumbling spot natural gas prices on Tuesday.

Grid operators along PJM regions in the Midwest forecast mixed demand with the PJM AEP region potentially peaking at 18,405 MW on Tuesday and 17,418 MW on Wednesday while the PJM ComEd region should top out at 13,193 MW on Tuesday and 13,295 MW by midweek.

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.