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AM Power Report: Prices could flounder on softer demand prospects

Powervalues at theday-ahead markets could deflate Tuesday, April 5, amid pressure from prospectsfor demand weakness in much of the country at midweek, likely to be limited,however, by steadily advancing front-month natural gas futures.

in the priortrading session, the front-month May contract was extending higher earlyTuesday ahead of the opening bell, crossing back above $2.000/MMBtu to tradenear $2.013/MMBtu, up 1.5 cents, as forecast models indicate cooler-than-normalweather could be in store in the near term for many major consuming hubs.

Next-daynatural gas values are also likely to shift higher in many cases Tuesday, whichcould limit any downside price action at some regional power markets.

Onthe demand side, load forecasts for midweek are predominantly biased lower.

Inthe Northeast, load in New England is forecast to peak at 16,410 MW on Tuesdayand 16,170 MW on Wednesday, while demand in New York is seen cresting at 19,569MW on Tuesday and 18,717 MW in the middle of the workweek. In the Mid-Atlantic,PJM Western region load is expected to hit a high at 52,221 MW on Tuesday and51,133 MW on Wednesday, while demand in PJM Mid-Atlantic is projected to topout at 35,591 MW on Tuesday and 35,144 MW on Wednesday.

Inthe Midwest, load in the PJM AEP region is poised to reach highs at 17,116 MWon Tuesday and 17,111 MW on Wednesday, while PJM ComEd demand should near11,670 MW on Tuesday and 11,206 MW at midweek.

Inthe South, ERCOT load is seen touching a high near 41,267 MW on Tuesday and39,138 MW in the middle of the business week. In the West, demandin CAISO is called to reach 29,917 MW on Tuesday and 30,659 MW on Wednesday,running against the wider decline.

Interm trading, gainsat the natural gas futures arena that drove fueling costs higher encouraged theupside to prevail in price action for May power delivery in the week's openingsession, except in the West.

Inthe East, prompt-month power deals added between 60 cents and 70 cents toaverage at near $33 at NEPOOL-Mass and at almost $35 at PJM West, as powertransactions for delivery further out to June spanned the mid-$30s in NewEngland and the high $30s at PJM West.

Inthe Midwest, an uptick on either side of 50 cents took front-month powerpricing at the PJM markets to indexes at above $32 at the AD hub and at roughly$29 at the Northern Illinois hub, as a near 70-cent increase drove price activityfor month-ahead power to atop $29 at MISO Indiana. Power values for June at thethree hubs were likewise pegged in the high $20s to the low $30s.

Inthe South, the ERCOT markets saw price activity for May power advance by about70 cents across the board to indexes spread between $24 and $27, as regionalpricing for June power ran through the high $20s to the low $30s.

Inthe West, California saw power values for May deflate by 25 cents against thewider uptick to average at around $22 at North Path-15 but hold near steady atan index atop $19 at South Path-15, as Mid-Columbia May eased by 15 cents toabove $9 and Palo Verde May rose by about 50 cents to almost $18. Prices forJune power were spotted in the low $10s at Mid-Columbia and in the low $20s elsewherein the region.

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Marketprices and included industry data are current as of the time of publication andare subject to change. For more detailed market data, including power andnatural gasindex prices, as well as forwards and futures, visitour Commodities Pages.