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AM Power Report: Dailies could open week softer amid lackluster fundamentals

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AM Power Report: Dailies could open week softer amid lackluster fundamentals

Price action for day-ahead power could be biased lower Monday, Dec. 19, as ongoing losses at the natural gas futures arena conspire with expectations for easing demand in much of the country as the workweek unfolds.

Easing almost 2 cents in the Dec. 16 session, front-month natural gas futures were down another 6.7 cents overnight on profit-taking. Ahead of the market open early Monday, the January 2017 gas futures contract was seen at $3.348/MMBtu.

Absent any weather-side demand in certain regions, day-ahead natural gas markets are likely to shift lower in most cases Monday, in tandem with any sustained losses in the futures arena.

On the demand side, outlooks suggest predominantly declining load as the new workweek unfolds.

In the Northeast, demand in New England is projected to peak at 19,400 MW on Monday and 18,880 MW on Tuesday, while load in New York is expected to reach highs at 22,145 MW at the start of the fresh workweek and 21,382 MW on Tuesday. In the Mid-Atlantic, PJM Western region demand is forecast to hit highs at 64,755 MW on Monday and 61,492 MW on Tuesday, while PJM Mid-Atlantic load is seen cresting at 41,695 MW on Monday and 40,917 MW on Tuesday.

In the Midwest, demand in the PJM AEP region is set to defy the wider downtrend, as it is called to reach 19,809 MW on Monday and 20,304 MW on Tuesday, while load in PJM ComEd is projected to top out at 15,703 MW on Monday and 14,272 MW on Tuesday.

In the South, ERCOT load is forecast to touch a high near 59,135 MW on Monday and 55,336 MW on Tuesday. In the West, CAISO demand is poised to see highs at 31,431 MW at the return of the workweek and 30,787 MW on Tuesday.

At the term markets, power prices for January 2017 were predominantly tethered to the downside ahead of the weekend, as weakness at the natural gas futures complex drove fueling costs lower.

In the East, losses of more than $1 steered price activity for prompt-month power to indexes near $68 at NEPOOL-Mass and at about $47 at PJM West. Power values for February 2017 were pegged in the low $70s in New England and also in the high $40s at PJM West.

In the Midwest, transactions for January 2017 power at the PJM markets shed between $1 and $2 to average near $40 at the AD hub and close to $38 at the Northern Illinois hub, as similar deals at MISO Indiana tacked on 10 cents against the dominant decline to average about $46. Power trades for February 2017 across the three hubs were pegged in the high $30s to the low $40s.

In the South, front-month power parcels at the ERCOT markets gave back about 20 cents across the board in deals averaging roughly between $30 and $32, while power for February 2017 across the region was similarly quoted in the low $30s.

In the West, California saw power values for January 2017 advance by 10 cents against the wider retreat to an index at above $39 at North Path-15 but deflate by 45 cents to average atop $37 at South Path-15, while month-ahead power prices fell by $1 at Mid-Columbia and slid by roughly 50 cents at Palo Verde to indexes above $29. Price action for February 2017 power was spread in the mid- to high $30s in California and also in the high $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.