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AM Power Report: Dailies look to soft demand as Easter weekend approaches

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Essential Energy Insights - January 2021


AM Power Report: Dailies look to soft demand as Easter weekend approaches

Following a session of soft prices on Wednesday, declining demand forecasts should depress power dailies across the U.S. on Thursday, March 29, despite a slight advance in the natural gas markets.

After ending the previous session with a 1.6-cent loss, the May natural gas contract recovered higher overnight, last trading 3.9 cents higher at $2.737/MMBtu at 7:10 a.m. ET, as traders jockey positions ahead of the midmorning release of weekly storage data. Forecasts imply an above-average withdrawal of 72 Bcf for the week ended March 23.

With natural gas offering little support, power dailies likely won't find much support from demand as moderating weather across most of the country begins to reduce heating demand.

In the East, New England could see load top 14,700 MW on Thursday and 13,650 MW on Friday while load in New York is poised to hit 17,683 MW on Thursday and 16,730 MW on Friday. In the mid-Atlantic, the PJM Western region should see demand reach 47,806 MW on Thursday and 48,061 MW on Friday while the PJM Mid-Atlantic region looks to load peaks of 31,848 MW on Thursday and 30,241 MW on Friday.

In the Midwest, demand in the PJM AEP region is expected to reach 14,963 MW on Thursday and 14,964 MW on Friday while load in the ComEd region is poised to reach 11,435 MW on Thursday and 11,145 MW on Friday.

Elsewhere, the ERCOT grid operator sees load reaching 41,847 MW on Thursday and 40,355 MW on Friday.

In the West, demand in California is expected to reach 28,641 MW on Thursday and 28,278 MW on Friday.

Looking further out, term power products were pressured by Wednesday's losses in the natural gas futures complex.

In the East, deals for April delivery at the NEPOOL Mass hub were pegged near $38.50, down 0.1% on the day, while PJM West saw front-month action near $34.80, up 0.2% on the day.

In the Midwest, April deals across the region were spotted in the upper $20s to low $30s with the PJM AEP-Dayton hub above $34 sporting a near $7 premium to PJM Northern Illinois at below $28 but with AEP-Dayton near equal footing with MISO Indiana. However, all three shifted lower on the day with the AD hub down 2.14%, the NI hub down 4.5% and Indiana down 1.7%.

In Texas, ERCOT saw April deals at the North location fetching the high $20s, off 3.9% on the day and more than $5 below the second-quarter product.

In the West, Northwest markets declined amid improving hydropower supply with April power deals at Mid-Columbia down 4.1% to near $15. In California, April deals at South Path-15 were spotted in the low $20s, less than $1 below North Path-15, but with both markets up slightly on the day.

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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, natural gas and coal index prices, as well as forwards and futures, visit our Commodities Pages.