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AM Power Report: Dailies could be boosted by load forecasts at midweek

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Essential Energy Insights - September 17, 2020

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AM Power Report: Dailies could be boosted by load forecasts at midweek

Power dailies could log gains Wednesday, Dec. 14, as traders consider predominantly supportive demand expectations for the latter part of the workweek.

However, traders will also keep attuned to continued losses at the natural gas futures arena. Slipping 3.3 cents in the Dec. 13 trading day, front-month January 2017 natural gas futures were extending lower overnight. At last look early Wednesday, the contract was down another 2.5 cents to trade near $3.449/MMBtu.

Day-ahead natural gas markets could see choppy moves at midweek, as pricing at some hubs could come under pressure due to the softness in futures. However, weather-side support is likely to boost values in other areas of the country, with load outlooks for the latter part of the workweek predominantly aimed higher with some frigid conditions set to invade the Northeast and Midwest.

In the Northeast, demand in New England is expected to see highs at 18,020 MW on Wednesday and 19,400 MW on Thursday, while load in New York is forecast to hit highs at 21,350 MW on Wednesday and 22,596 MW in the latter part of the business week. To the south, PJM Western region load is projected to top out at 62,787 MW on Wednesday and 68,507 MW on Thursday, while PJM Mid-Atlantic demand is called to reach 39,276 MW on Wednesday and 43,606 MW on Thursday.

In the Midwest, load in PJM AEP region could peak at 18,892 MW on Wednesday and 22,253 MW on Thursday, while load in PJM ComEd could run against the wider uptrend, as it is expected to crest at 15,827 MW on Wednesday and 15,538 MW on Thursday.

In the South, ERCOT demand is projected to touch a high near 40,937 MW on Wednesday and 42,254 MW in the latter part of the workweek. In the West, load in CAISO should near 30,400 MW on Wednesday and 29,770 MW on Thursday.

At the term markets, price activity for January 2017 power was choppy Dec. 13, as front-month natural gas futures traded sideways to drive fueling costs in varied directions before ultimately ending the session on the downside.

In the East, prompt-month power transactions unraveled almost $5 to average at near $73 at NEPOOL-Mass and deflated by about $4 to an index above $51 at PJM West. Power deals for February 2017 were carried out in the high $70s in New England and in the low $50s at PJM West.

In the Midwest, losses on either side of $3 at the PJM Interconnection markets steered front-month power pricing to indexes close to $46 at the AD hub and at roughly $43 at the Northern Illinois hub, as a near 10-cent gain took MISO Indiana January 2017 price action to an average near $46. Power values for February 2017 spanned the high $30s to the mid-$40s.

In the South, price action for January 2017 power at the ERCOT markets was flat across the board at indexes ranging from above $31 to $33, while regional pricing for February 2017 power was likewise spread in the low $30s.

In the West, California saw front-month power deals rise by nearly 60 cents to average at about $40 at North Path-15 and climb by almost 40 cents to an index atop $38 at South Path-15, as month-ahead power transactions shed roughly 40 cents at Mid-Columbia but added 50 cents at Palo Verde to average at almost $31 at both hubs. Power trades for February 2017 were done also in the high $30s in California and 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.