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Northeast, West markets boosted by demand; Texas, Midwest dailies sag with gas

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021

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Essential Energy Insights - January 2021


Northeast, West markets boosted by demand; Texas, Midwest dailies sag with gas

Major next-day markets across the country choppedaround Tuesday, July 12, as expectations for stronger midweek demand clashedwith losses in spot natural gas prices.

Deriving support from weather forecasts and ashrinking storage overhang, the front-month August natural gas futures contractclosed the day up 3.2 cents to settle at $2.734/MMBtu. On the other hand, mostspot natural gas markets revisited the downside.

Northeastdailies rise with demand support; PJM West values ease

Gains continued to define price activity in most ofthe East Tuesday as support from mixed to higher spot natural gas prices wasable to offset some pressure from varied midweek load forecasts.

Next-day deals at NEPOOL-Mass and New York Zone G wereboth done in the low to mid-$40s, up from prior day indexes of $35.00 and$37.50, respectively, while trades at New York Zone A rose by more than $15 andwere pegged in the mid-$50s to mid-$70s. In the Mid-Atlantic, transactions atthe PJM Western region eased by about a dollar in the mid- to high $30s.

Most day-ahead markets in the Northeast added $2 to $4from Monday and averaged $40.05 at NEPOOL-Mass, $56.32 at New York Zone A,$40.69 at New York Zone G and $41.57 at New York Zone J.

Midweek load forecasts in the Northeast are aimedhigher with New England anticipating Wednesday demand to top out at 21,880 MW,rising 2,490 MW from Tuesday, while peak Wednesday load in New York could touch27,301 MW, up by around 1,900 MW from the day prior.

Demand is set to fall slightly in the Mid-Atlantic asthe PJM Mid-Atlantic region projects peak Wednesday demand to hit 46,603 MW,down by roughly 400 MW from Tuesday, while the PJM Western region could seeload crest at 74,653 MW on Wednesday, shedding close to 50 MW from Tuesday.

In a July 12 post, PJM issued a Hot Weather Alert from8 a.m. to 10 p.m. ET on July 14 and 15 for the Mid-Atlantic and Dominionregions.

Westdailies move higher with demand, anchored by gas

Projections calling for strong Wednesday demandallowed Western power markets to extend prior day gains Tuesday with the uptickslightly held back by retreating spot natural gas prices.

The California ISO predicts peak Wednesday demand totouch 39,236 MW, rising by more than 3,800 MW from Tuesday. Encouraged by thebullish load picture, gains of around $3 were seen at North Path-15 and SouthPath-15 where power traded in the mid-$30s and high $30s, respectively. In theSouthwest, Palo Verde and Mead saw dailies exchanged in the mid-$30s, up fromMonday's indexes of $31.25 and $30.00, respectively. Northwestern hubscontinued the trend, with Mid-Columbia and COB up by around $3 to $4 fromMonday in the mid- to high $20s and low $30s, respectively.

ERCOTdailies wane as gas losses offset strong demand

A downtick in spot natural gas prices sent next-daydeals in Texas slightly lower Tuesday with losses limited by firm midweek loadprojections. Demand in Texas is expected to see a Wednesday highat 67,007 MW, up by 1,215 MW from Tuesday. However, next-day deals at ERCOTNorth were unfazed and slipped by less than a dollar in the high $20s.

Conversely, most Texas day-ahead markets added lessthan a dollar and averaged $29.41 at ERCOT Houston, $27.33 at ERCOT North,$28.18 at ERCOT South and $26.57 at ERCOT West.

Midwestdailies ease with mixed demand, cheap gas

After posting gains the day prior, power markets inthe Midwest retreated Tuesday, with losses fueled by declining spot natural gasprices and little support from choppy midweek load outlooks. Power at MISOIndiana traded a dollar lower in the low $40s, while deals at PJM AEP-Daytoneased by less than a dollar in the high $30s.

PJM regions in the Midwest should see mixed midweekdemand with load in the PJM AEP region possibly peaking at 21,246 MW on Wednesday,off by more 300 MW from Tuesday, while demand in the PJM ComEd region shouldrun up to 20,615 MW on Wednesday, up by around 400 MW from Tuesday.

Market prices and included industry data are currentas of the time of publication and are subject to change. For more detailedmarket data, including power, naturalgas and coal indexprices, as well as forwards and futures,visit our Commodities Pages.