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Texas, Midwest power values edge higher; East, West dailies flounder

Next-day power markets across the country moved in different directions Friday, Dec. 16, as traders took into account subdued Dec. 19 load forecasts and mixed to higher spot natural gas prices.

After falling the day prior, losses continued for the front-month January 2017 natural gas futures contract as it closed the workweek down 1.9 cents at $3.415/MMBtu. Waving aside typically subdued weekend demand, spot gas markets leaned mixed to higher on the session.

The National Weather Service forecasts that "a storm developing in the Plains will bring significant winter precipitation and dangerously cold wind chills to a large portion of the country through the weekend."

Texas dailies jump on post-weekend load outlooks

Next-day power packages in Texas rose Friday with gains encouraged by markedly higher Dec. 19 load forecasts and some support from varied spot gas prices.

ERCOT anticipates Dec. 19 demand to surpass 56,700 MW, climbing more than 16,400 MW from Friday. Bolstered by the load forecast, next-day deals at ERCOT North increased more than $20 and ranged in the mid-$50s.

Owing to deflated weekend demand, day-ahead markets ticked lower. DAMs at ERCOT North, ERCOT South and ERCOT West shed $1 to $3 from Thursday and averaged $20.52, $20.17 and $17.56, respectively, while DAMs at ERCOT Houston slipped by roughly $5 and averaged $21.38.

Midwest values exit workweek boosted by gas prices

Rising regional spot gas prices offset mixed Dec. 19 load outlooks and helped dailies in the Midwest edge higher on Friday.

Power deals at PJM AEP-Dayton added more than $4 from Thursday in the high $40s while trades at MISO Indiana rose more than $5 in the high $50s to low $60s.

Grid operators forecast mixed demand to kick off the new workweek. Load in the PJM AEP region may crest at 20,610 MW on Dec. 19, down roughly 600 MW from Friday, while demand in the PJM ComEd region could top out at 15,421 MW on Dec. 19, increasing about 900 MW from Friday.

East markets fall as fundamental support wanes

Despite hubs in the Northeast moving to 22-month highs the day prior, a lack of support from deflated Dec. 19 demand forecasts and a drop in spot gas prices pushed power markets in the region lower Friday.

In next-day trading, on-peak deals at NEPOOL-Mass fell more than $30s and spanned the low $70s while transactions at PJM West slipped roughly $10 on the session and ranged in the mid- to high $40s.

Pressured by typically lower weekend demand, regional day-ahead markets tumbled. DAMs at NEPOOL-Mass and New York Zone A dropped more than $30s from Thursday and averaged $66.26 and $21.43, respectively, while New York Zone G retreated by roughly $50 and averaged $50.90. Noting the biggest loss of the session were DAMs at New York Zone J, which fell more than $65 and averaged $53.35.

Failing to support power prices was a decline in spot gas prices. Gas deals at Transco Zone 6 New York lost more than $3.50 and averaged below $4.30/MMBtu while trades at TETCO-M3 were able to limit losses to less than 65 cents and averaged below $3.40/MMBtu

Demand forecasts for the Northeast and mid-Atlantic are aimed lower. Peak Dec. 19 load in New England should near 19,000 MW, down 1,110 MW from Friday, while New York could see Dec. 19 demand hit a high close to 21,850 MW, down about 1,450 MW from Friday. Load in the PJM Mid-Atlantic region may touch a Dec. 19 high at 40,812 MW, dropping more than 3,000 MW from Friday, while peak demand in the PJM Western region could reach 64,563 MW on Dec. 19, off by more than 500 MW from Friday's potential high.

Northwest, Southwest markets slip; Calif. dailies firm

Trading activity in the West, with the exception of deals done in California, was oriented to the downside Friday as traders ignored prospects of potentially stronger Dec. 19 demand and flat to predominantly higher spot natural gas prices.

Hubs in the Northwest lost more than $20 from Thursday with power changing hands in the high $20s to low $30s at Mid-Columbia and the low $30s at COB. Southwest dailies stumbled by more than $5 with deals ranging in the high $20s at Palo Verde and the low $30s at Mead. In California, transactions at South Path-15 were little changed from Thursday and were heard in the high $30s to low $40s.

The California ISO expects Saturday demand to peak at 28,149 MW, down almost 1,000 MW from Friday, but with load possibly rebounding by the start of the fresh workweek Dec. 19.

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.