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AM Power Report: Dailies could follow load to diverging directions

Next-day power values could be mixed Wednesday, May 31, as traders consider jumbled demand forecasts for the latter part of the workweek alongside stalled natural gas futures trading activity.

Sinking more than 16 cents in the prior session, NYMEX July natural gas were slightly higher early Wednesday ahead of the opening bell. At last look at around 6:30 a.m. ET, the contract was up 0.7-cent to $3.152/MMBtu as market fundamentals remain overwhelmingly bearish.

Day-ahead natural gas prices at the major consuming hubs could see a mostly weaker session of trade at midweek, with the prior day's losses in futures likely offering pressure against a backdrop of mild weather in many regions of the country.

On the demand side, outlooks point to regional variations in load in the latter part of the workweek.

In the Northeast, demand in New England is poised to peak at 14,720 MW on Wednesday and 14,950 MW on Thursday, while load in New York is called to reach 18,402 MW on Wednesday and 18,563 MW in the latter part of the business week. In the Mid-Atlantic, demand in PJM Western region is seen cresting at 49,434 MW on Wednesday and 49,396 MW on Thursday, while load in PJM Mid-Atlantic is projected to hit highs at 32,775 MW on Wednesday and 31,953 MW on Thursday.

In the Midwest, PJM AEP region load could reach highs at 15,490 MW on Wednesday and 15,541 MW on Thursday, while PJM ComEd demand could top out at 11,524 MW on Wednesday and 11,684 MW in the latter part of the workweek.

In the South, load in Texas is forecast to see highs at 55,209 MW on Wednesday and 50,751 MW on Thursday. In the West, California demand should near 29,100 MW on Wednesday and 29,950 MW on Thursday.

In forward action, power for June delivery had a predominantly strong showing in its penultimate session as the front-month offering at the start of the truncated workweek May 30. Power parcels for July were weaker across the board, in tandem with July gas futures that tumbled on the session to ultimately signal diminished fueling costs.

In the East, pricing for June power shed about 90 cents against the dominant uptrend to average at almost $34 in New England but advanced by near 20 cents to an index atop $35 at PJM West. Farther along the forward curve, power values for July fell by approximately $4 in New England and slid by roughly $2 at PJM West to indexes at around $42.

In the Midwest, an almost 30-cent increase took PJM Northern Illinois June to an average at roughly $34, as better-than-$1 losses that defied the broad uptick steered PJM AD June and MISO Indiana June to indexes at around $35. Power products for July were quoted on either side of $40 in deals down by about $2 at PJM Northern Illinois and off near $3 at both PJM AD and MISO Indiana.

In the South, month-ahead power transactions at the ERCOT markets climbed by 30 cents to about 40 cents to indexes ranging roughly from $31 to as much as $38, while regional trading activity for July power delivery gave back about $2 overall to average between $39 and $48.

In the West, California saw prompt-month power values climb by near 60 cents at North Path-15 and ascend by over $1 at South Path-15 to indexes on either side of $35, while front-month pricing added about 70 cents to average at close to $21 at Mid-Columbia and tacked on 50 cents to average about $35 at Palo Verde. Price action for July power shed between $1 and $2 at both North Path-15 and South Path-15 to average $36 and atop $37, respectively, while Mid-Columbia July was about 10 cents softer on the day at an index at approximately $29 and Palo Verde July was about $2 weaker above $39.

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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.