A recovery in regional spot natural gas prices helped boost most power markets across the U.S. on Tuesday, Jan. 24, but values were pressured by expectations of mixed midweek demand.
In gas futures, the front-month February contract extended early gains and added 3.6 cents to settle at $3.279/MMBtu. Following the rise in futures, most spot gas markets rebounded.
AccuWeather.com said in a Jan. 24 forecast that "much colder air will sweep into the eastern United States later this week and will have staying power well into February."
Rebounding gas prices support Midwest values
An uptick in regional spot gas prices and expectations of robust Wednesday demand boosted Midwest dailies on Tuesday.
Most of the session's trading activity was seen at MISO Indiana where next-day deals added around $4 and ranged in the low $40s.
PJM regions are calling for slightly higher midweek demand. Peak load in the PJM AEP region may touch 16,701 MW on Tuesday and 16,931 MW on Wednesday while demand in the PJM ComEd region should run up to 12,772 MW on Tuesday and 12,840 MW the following day.
Recovering gas prices offset slack demand to fuel Texas market gains
Power prices in Texas increased Tuesday as rising spot gas prices worked to counter markedly lower Wednesday demand forecasts.
At ERCOT North, next-day power was traded at a premium of about $4 in the mid-$20s.
Mixed to predominantly higher moves were noted across day-ahead markets. DAMs at ERCOT North and ERCOT West rose by more than $5 and averaged $26.02 and $26.05, respectively, while day-ahead power deals at ERCOT South increased by around $3 and averaged $26.76. Running the other way were trades at ERCOT Houston, which slipped by roughly a dollar and averaged $27.71.
ERCOT is forecasting highs of 40,826 MW on Tuesday and 38,445 MW by Wednesday.
Northwest values tick higher; Calif., Southwest dailies firm
Trading activity in the West was biased higher Tuesday, owing to strong demand outlooks and an uptick in spot gas prices.
On-peak prices in the Northwest were up by about $2 to $3 from Monday and were posted in the low to mid-$30s at Mid-Columbia and the mid-$30s at COB. Deals in California saw little change with North Path-15 and South Path-15 trades each spanning the high $30s, mostly flat to Monday. Southwestern hubs were varied with Palo Verde adding close to $1 in the high $20s to low $30s while Mead deals eased and bordered the low $30s.
Peak demand in California is expected to touch 30,702 MW on Tuesday and 30,866 MW by midweek.
Declining load forecasts push East dailies lower
Forecasts outlining soft midweek demand possibly encouraged market participants to trade next-day power in the East at lower value Tuesday but recovering gas prices offered counter-support.
At next-day markets, power deals at NEPOOL-Mass and PJM West shed $2 to $3 from Monday and ranged in the low $30s and high $30s, respectively.
Regional day-ahead markets posted losses of around $4 to $5 on the session and averaged at $30.47 at NEPOOL-Mass, $28.76 at New York Zone A, $33.18 at New York Zone G and $33.58 at New York Zone J.
Load in the East is expected to taper off by the middle of the workweek. New England demand could see highs of 17,700 MW on Tuesday and 17,000 MW on Wednesday while load in New York should top out at 20,385 MW on Tuesday and 20,145 MW by midweek. The PJM Mid-Atlantic region should see peaks of 37,184 MW on Tuesday and 35,552 MW on Wednesday while demand in the PJM Western region should crest at 54,947 MW on Tuesday and 52,564 MW the following day.
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.