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AM Power Report: Dailies could tick higher with load, gas

Price action for day-ahead power could be lifted Thursday, Jan. 26, by the combined support of mostly rising demand outlooks for the close of the workweek and ongoing gains at the natural gas futures arena.

Advancing 5.3 cents in the prior session, February natural gas futures were extending those gains early Thursday ahead of the midmorning release of weekly storage data. At last look, the contract was pegged near $3.410/MMBtu, up 7.8 cents.

Market participants are calling for a withdrawal of anywhere from 111 Bcf to 135 Bcf, with a consensus formed at a 121-Bcf pull for the week ended Jan. 20. The figure will compare to a 176-Bcf five-year-average withdrawal and the 202-Bcf pull reported for the same week in 2016.

In terms of demand, outlooks suggest predominantly stronger load at the close of the workweek, even as business-related demand typically tapers off approaching the weekend break.

In the Northeast, demand in New England will likely top out at 16,400 MW on Thursday and 16,550 MW on Friday, while New York load could defy the wider uptrend as it is called to reach highs at 20,211 MW on Thursday and 20,120 MW at the end of the business week. To the south, demand in the PJM Western region is expected to crest at 55,901 MW on Thursday and 56,219 MW on Friday, while PJM Mid-Atlantic load should near 35,566 MW on Thursday and 35,932 MW on Friday.

In the Midwest, PJM AEP region demand could peak at 17,280 MW on Thursday and 17,588 MW on Friday, while PJM ComEd load will likely hit highs at 12,955 MW on Thursday and 12,979 MW at the close of the business week.

In the South, load in ERCOT is projected to see highs at 41,439 MW on Thursday and 44,380 MW on Friday.

In the West, demand in CAISO could touch a high near 30,430 MW on Thursday and 29,180 MW at the end of the workweek, which should exert downside momentum for power dailies in the region Thursday when the offering is typically altered to feature two-day, partly weekend products for Friday-Saturday delivery.

In forward trade, price action for February power was choppy at midweek, even as steadily advancing front-month natural gas futures implied a continued uptick in fueling costs.

In the East, power transactions for February were flat at indexes atop $59 at NEPOOL-Mass and close to $41 at PJM West, while power deals for March were spotted in the low $50s in New England and in the low $40s at PJM West.

In the Midwest, the prompt-month power offering shed about 40 cents at the PJM markets in trades carried out at above $38 at the AD hub and at roughly $36 at the Northern Illinois hub, but was almost unchanged day on day in transactions averaging near $41 at MISO Indiana. Power for March across the three hubs was similarly quoted in the high $30s to the low $40s.

In the South, month-ahead power prices deflated by about 10 cents at both ERCOT North and ERCOT South but added about 80 cents at ERCOT West to average on either side of $28 across the three hubs, as front-month power pricing at ERCOT Houston held steady at an index atop $32. Along the forward curve, price activity for March power likewise spanned the high $20s to the low $30s.

In the West, California saw power deals for February advance by 5 cents to an index at $36 at North Path-15 but slump by almost 10 cents to average near $34 at South Path-15, while similar transactions were lifted by 60 cents to an index near $30 at Mid-Columbia but unchanged at an average near $27 at Palo Verde. Trades for March power were assessed in the high $20s to the low $30s in California and in the low to mid-$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.