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Power markets move mixed with diverging fundamentals


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Power markets move mixed with diverging fundamentals

Varied load forecasts and mixed spot gas prices sent power markets across the U.S. moving in different directions Thursday, Oct. 12.

Despite reports of an 87-Bcf net injection during the week ended Oct. 6, which was above consensus estimates, the front-month November natural gas futures contract moved higher Thursday and closed the session up 10 cents at $2.989/MMBtu. On the other hand, spot gas markets chopped around and pressured power dailies.

Following increased output at three reactors, total U.S. nuclear plant availability rose to 88.85% early Oct. 12.

East dailies flounder with lackluster fundamentals

Deflated Friday load forecasts and declining spot gas prices fueled a downtick at eastern power markets Thursday.

At the next-day markets, power prices at the New England Mass hub and PJM West fell by about $2 and changed hands in the mid-$20s at the former and the high $20s at the latter.

Day-ahead deals also held a downward bias with New York values falling by $1 to $4 from the midweek to averages of $21.88 at Zone A, $24.51 at Zone G and $32.58 at Zone J. Conversely, deals at the Mass hub added around $7 from Wednesday and averaged $37.98.

Demand in the Northeast may fall as the workweek comes to a close, with load in New England possibly reaching 14,620 MW on Thursday and 14,150 MW on Friday while demand in New York should touch 18,420 MW on Thursday and 17,963 MW on Friday.

Conversely, the mid-Atlantic will see varied demand with load in the PJM Mid-Atlantic region potentially topping out at 31,660 MW on Thursday and 30,690 MW on Friday, while load in the PJM Western region should run up to 47,497 MW on Thursday and 48,080 MW on Friday.

Midwest values firm with load support

Strong Friday load forecasts countered easing spot gas prices and helped keep power values in the region on the positive side of the ledger Thursday.

MISO Indiana saw the bulk of Thursday's action with power exchanged in the mid-$30s, up roughly a dollar on the session.

Demand in the region is set to rise on the final day of the workweek with the PJM AEP region forecast to see highs of 14,734 MW on Thursday and 14,819 MW on Friday, while the PJM ComEd region should see peaks of 11,108 MW on Thursday and 11,592 MW on Friday.

Calif., Southwest values muted; Northwest values mixed

Western power markets moved in different directions Thursday reflecting pressures from slack weekend demand associated with next-day schedule revisions but finding some support in firm spot gas prices.

In California, power deals at South Path-15 were flat to Wednesday and pegged in the low to mid-$30s. Gains of less than a dollar were noted in the Southwest with Palo Verde trades heard in the mid- to high $20s and Mead transactions quoted in the mid-$20s to low $30s. Mixed moves were seen up in the Northwest, with Mid-Columbia shedding around a dollar in the mid-$30s while the California-Oregon Border hub saw power trade a dollar higher in the high $20s to low $30s.

The California ISO is projecting peaks of 28,868 MW on Thursday and 28,866 MW on Friday.

Texas day-ahead markets mixed despite demand support

Day-ahead markets in Texas chopped around Thursday as values ignored incentives offered by higher load forecasts and some support from varied spot gas prices.

The Electric Reliability Council of Texas is calling for highs of 51,966 MW on Thursday and 57,001 MW on Friday.

Mixed moves were noted across day-ahead markets despite load support, with ERCOT North and ERCOT West adding $3 to $5 from Wednesday and averaging $30.50 and $30.01, respectively. On the other hand, deals at ERCOT Houston fell by more than $30 and averaged $45.06 while losses of roughly $2 were seen at ERCOT South, where power deals averaged $31.85.

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.