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AM Power Report: Dailies could meander amid varied fundamentals

Price activity for next-day power could be choppy Thursday, Feb. 2, as mixed demand outlooks for the close of the workweek combine with recent volatility at the natural gas futures complex.

Rising 5.1 cents in the midweek session, March natural gas futures were probing the downside early Thursday ahead of the opening bell. At last look, the front-month contract was down 3.8 cents to trade near $3.130/MMBtu ahead of the midmorning release of the latest round of weekly gas storage data from the U.S. Energy Information Administration.

Analysts and traders are calling for an average 98-Bcf pull from storage for the week that ended Jan. 27. The figure will compare to a 166-Bcf five-year-average draw and the 169-Bcf pull reported for the corresponding week in 2016.

On the demand side, grid operators across the country see diverging load at the close of the workweek.

In the Northeast, demand in New England is poised to decline from highs at 17,350 MW on Thursday and 17,200 MW on Friday, while load in New York is set to remain firm as it is called to reach 20,875 MW on Thursday and 20,899 MW at the close of the workweek. Farther south, stronger load is in store, as PJM Western region demand is seen touching a high near 59,200 MW on Thursday and 60,301 MW on Friday, while PJM Mid-Atlantic load is forecast to crest at 37,682 MW on Thursday and 38,705 MW on Friday.

In the Midwest, varied demand is anticipated, as load in the PJM AEP region is projected to hit highs at 18,375 MW on Thursday and 19,414 MW at the end of the business week, while demand in PJM ComEd is expected to peak at 13,757 MW on Thursday and 13,394 MW on Friday.

In the South, load in ERCOT should near 40,468 MW on Thursday and 40,243 MW on Friday, joining the downtrend.

In the West, demand in CAISO could top out at 29,700 MW on Thursday and 28,900 MW on Friday, which should exert pressure on power dailies in the region Thursday as traders book revised, partly-weekend products for Friday-Saturday delivery.

In term activity, power for March delivery predominantly favored the upside in its debut as the front-month offering Feb. 1, as gains at the natural gas futures arena signaled an uptick in fueling costs.

In the East, deals for March power were bolstered by 40 cents to an index near $46 at NEPOOL-Mass and lifted by more than $2 to an average atop $37 at PJM West, while power transactions for delivery in April were assessed in the high $30s in New England and in the mid-$30s at PJM West.

In the Midwest, the fresh prompt-month power parcel tacked on 10 cents in trades done at roughly $35 at the PJM AEP-Dayton hub and added about 50 cents in transactions carried out at close to $33 at PJM Northern Illinois, but shed more than $1 against the dominant uptick in deals averaging above $37 at MISO Indiana. Power for April delivery across the three hubs was similarly quoted in the low to high $30s.

In the South, gains of about 20 cents to as much as 40 cents at the ERCOT markets took price action for March power to indexes ranging from atop $25 to near $33, as regional pricing for April power spanned the high $20s to the low $30s.

In the West, California saw power values for March hold flat at an index at roughly $30 at North Path-15 but pick up almost 10 cents to average close to $27 at South Path-15, while front-month power prices at Mid-Columbia and Palo Verde rose by nearly 30 cents to an index atop $21 and advanced by 10 cents to average at about $24, respectively. Power pricing for April was pegged in the high $10s at Mid-Columbia and in the low to 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.