Strong Thursday demand forecasts and a rebound in spot natural gas prices helped push next-day power markets across the country higher on Wednesday, Feb. 1.
After two consecutive sessions of losses, the front-month March natural gas futures contract returned to the positive side of the ledger Wednesday and added 5.1 cents to settle at $3.168/MMBtu. Likewise, spot gas markets also regained ground and helped provide power markets with a boost.
According to a forecast from AccuWeather.com, a push of cold air, which reached the northern Plains on Tuesday, "will continue to spill eastward during the first days of February."
Load, gas support help East dailies rebound
Forecasts for robust Thursday demand and a recovery in regional gas prices helped contribute to gains at eastern next-day power markets on Wednesday.
At NEPOOL-Mass, next-day deals rose by roughly $6 from Tuesday and spanned the mid-$40s, while power deals at New York Zone G and PJM West rose by about $2 to $3 on the session and ranged in the high $30s to low $40s and the low $30s, respectively.
Day-ahead markets also advanced with New York markets adding $2 to $3 and New England markets up close to $5. New York saw DAMs average at $29.61 in Zone A, $38.29 in Zone G and $38.50 in Zone J, while Mass Hub DAMs averaged $42.20. PJM West saw DAMs rise more than $2.50 to an average at $30.47.
Grid operators forecast increased demand for the Northeast and mid-Atlantic regions during the latter part of the workweek. Load in New England may top out at 17,200 MW on Wednesday and 17,400 MW on Thursday, while demand in New York could crest at 20,414 MW on Wednesday and 20,913 MW on Thursday. Peak load in the PJM Mid-Atlantic region should touch 36,773 MW on Wednesday and 38,194 MW on Thursday, while demand in the PJM Western region may reach highs of 54,995 MW on Wednesday and 59,834 MW on Thursday.
Texas values tick higher on demand expectations, rising gas prices
Potentially higher Thursday demand and an uptick in spot gas prices boosted power markets in Texas on Wednesday.
Traders at ERCOT North exchanged next-day power packages in the mid-$20s, up around a dollar from Tuesday.
Day-ahead markets also ticked higher by $1 or $2, with average DAMs pegged at $25.20 at ERCOT North, $25.37 at ERCOT West, $28.07 at ERCOT South and $31.53 at ERCOT Houston.
ERCOT is calling for demand to run up to 39,401 MW on Wednesday and 40,018 MW on Thursday.
West dailies biased higher on higher demand, recovering gas prices
Price activity in the West favored gains Wednesday amid increasing Thursday demand and higher spot gas markets.
Power trades in the Northwest added almost $3 on the session and spanned the low to mid-$30s at Mid-Columbia and the low $30s at COB. Flat to higher moves were noted in California, with deals at North Path-15 gaining $2 in the high $30s while South Path-15 transactions were steady to Tuesday in the low to mid-$30s. Hubs in the Southwest followed suit, with deals at Palo Verde adding less than $1 in the mid-$20s while on-peak packages at Mead were traded a dollar higher in the mid-$20s as well.
California demand is near unchanged with highs of 29,892 MW and 29,896 MW expected on Wednesday and Thursday, respectively.
Midwest dailies flounder despite fundamental support
Power dailies in the Midwest swung lower Wednesday, ignoring calls for higher Thursday demand and stronger spot gas prices. Noting most of the session's action was MISO Indiana, where on-peak packages shed more than $3 from Tuesday and were traded in the low $30s.
Despite the weakness in dailies at the Indiana hub, PJM day-ahead markets ticked higher by anywhere from $3.50 to almost $5, with average DAMs pegged at $29.73 at the AEP-Dayton hub and at $35.50 at the Northern Illinois hub.
Regional load forecasts are aimed higher. The PJM AEP region should see highs of 16,994 MW on Wednesday and 18,653 MW on Thursday, while demand in the PJM ComEd region is poised to hit peaks of 12,842 MW on Wednesday and 13,677 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.