Next-day trading activity in the U.S. moved mixed to ultimately higher Tuesday, Dec. 13, owing to higher spot natural gas prices and expectations of greater heating demand driven by cold weather forecasts.
In the natural gas futures arena, the front-month January 2017 contract extended prior day losses and closed the session at $3.474/MMBtu, down 3.3 cents. Conversely, incoming cold weather pushed spot gas prices higher across most of the country, with trades at Algonquin Citygates seeing impressive gains.
According to the National Weather Service, "an arctic air mass will produce wind chills of -20 degrees [Fahrenheit] or colder across the northern Plains over the next few days." The air mass "will move down the Plains and into the Ohio and Tennessee Valleys into the mid-Atlantic and northeast by the end of the week," the NWS said.
Strong demand, gas gains push NEPOOL-Mass dailies higher
Higher heating demand driven by the cold weather outlooks combined with rising spot gas prices to prop up most power values in the East on Tuesday.
At NEPOOL-Mass, next-day power packages were traded in the low to high $70s, rising from a prior-day index of $50.05, while deals at PJM West added roughly $5 and spanned the low to mid-$40s.
Day-ahead markets also ticked higher. DAMs at NEPOOL-Mass rose by about $10 and averaged $68.11, while New York Zone G and New York Zone J added round $3 and averaged $55.06 and $55.10, respectively. DAMs at New York Zone A gained almost $2 and averaged $29.96.
Offering dailies with support, spot gas deals at Algonquin Citygates jumped more than $3.90 to an average above $9.85/MMBtu, while Transco Zone 6 New York saw gains of more than 70 cents and averaged atop $4.40/MMBtu.
Grid operators in the Northeast and mid-Atlantic anticipate elevated demand by midweek. Wednesday load in New England could touch a high near 18,000 MW, up 130 MW from Tuesday, while demand in New York may reach 21,292 MW on Wednesday, up more than 300 MW on the day. The PJM Mid-Atlantic region expects load to crest at 39,876 MW on Wednesday, rising more than 2,600 MW from Tuesday, while the PJM Western region may see demand top out at 63,392 MW on Wednesday, jumping roughly 4,100 MW from the day prior.
Midwest markets edge higher on load and gas support
A combination of elevated midweek demand and higher spot gas prices provided Midwest power markets with support Tuesday.
Power deals at PJM AEP-Dayton and MISO Indiana rose by more than $5 on the session and ranged in the low to mid-$40s and mid-$40s to low $50s, respectively.
Regional load outlooks are aimed higher, with the PJM AEP region called to see a midweek high near 19,307 MW, up roughly 1,500 MW from Tuesday, while the PJM ComEd region is calling for Wednesday demand to run up to 16,046 MW, rising by about 1,700 MW from Tuesday.
West markets post mixed moves ahead of midweek
Power packages traded along the West Coast moved in different directions Tuesday as some markets ignored forecasts for rising demand boosted by cold weather forecasts, as well as mixed to ultimately higher spot gas prices.
Dailies in the Southwest fell by about $2 to $3 on the session and spanned the high $20s to low $30s at Palo Verde and the low to mid-$30s at Mead. Power deals in California rose by around $2 to $3 on Monday and were exchanged in the mid-$40s at North Path-15 and the low to mid-$40s at South Path-15. Mixed but muted trading defined price activity up in the Northwest with Mid-Columbia easing in the low $40s to mid-$50s, while COB trades were little changed from Monday in the high $40s.
The California ISO expects peak Wednesday demand to hit 30,206 MW, up 135 MW from Tuesday.
Texas DAMs chop around despite fundamental boost
Robust midweek demand forecasts and modest gains in spot gas prices were not enough to support day-ahead markets in Texas on Tuesday.
Texas DAMs chopped around with ERCOT Houston falling more than $3 to average $28.51, while ERCOT South shed less than $1 and averaged $28.64. DAMs at ERCOT North added about a dollar and averaged $28.42, while ERCOT West deals gained almost $1 and averaged $28.46.
ERCOT is calling for midweek demand to surpass 40,300 MW, increasing more than 100 MW from Tuesday.
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.