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Power dailies biased higher on load expectations, gas gains

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Essential Energy Insights - February 2021

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


Power dailies biased higher on load expectations, gas gains

Outlooks suggesting mixed but ultimately higherThursday demand and support from rising spot natural gas prices drove mostnext-day markets to trade at a modest premium Wednesday, July 13, with only ahandful of locations running the other way.

At the natural gas futures complex, the front-monthAugust contract returned most of the gains derived from early trading andclosed the midweek session up by a scant 0.3 cent to settle at $2.737/MMBtu.

Despite a lackluster showing in futures, increased demandcontinued to drive most spot natural gas markets higher.

Eastvalues boosted by gas; New York Zone A falters

Next-day markets in the East, excluding trades done atNew York Zone A, were biased higher Wednesday as support from a rise in spotnatural gas prices was able to offset pressures from choppy Thursday loadforecasts.

At NEPOOL-Mass and New York Zone G, next-day dealswere done in the mid-$40s, each adding $1 to $2 from Tuesday. Farther south,dailies at PJM West soared by about $10 in trades heard in the mid- to high$40s. Defying the uptrend were transactions at New York Zone A, which slippedby around $4 to the high $60s.

Most day-ahead markets in the Northeast ticked higherwith DAMs in New York up by about $1 to $3 from Tuesday and posted averages of$60.28 at New York Zone A, $42.01 at New York Zone G and $44.45 at New YorkZone J. DAMs at NEPOOL-Mass slipped by around $2 to average $37.57.

Grid operators in the Northeast and Mid-Atlanticanticipate choppy load as peak Thursday demand in New England could reach21,330 MW, down by 270 MW from Wednesday while New York should see a Thursdayhigh at 28,349 MW, up by about 1,100 MW from the midweek. Peak load in the PJMMid-Atlantic region should reach 53,602 MW on Thursday, rising by roughly 6,500MW from Wednesday, while the PJM Western region is expected to see demand totop out at 72,251 MW on Thursday, off by around 1,400 MW from the prior day.

ERCOTdailies firm with fundamental support

Price activity in Texas was defined by modest gainsWednesday, owing to support from elevated Thursday demand outlooks and anuptick in regional spot natural gas markets.

Load in Texas is set to rise, with the ERCOT gridoperator expecting demand to top out at 67,935 MW on Thursday, up close to 450MW from Wednesday. Backed up by the higher load outlook, next-day deals atERCOT North added about a dollar and ranged in the high $20s.

DAMs leaned flat to higher with ERCOT Houston, ERCOTNorth and ERCOT South steady to Tuesday, averaging $29.73, $28.29 and $29.04,respectively, while deals at ERCOT West gained more than a dollar to $28.24.

MostWest markets firm, Mead dailies ease

Outlooks implying robust Thursday demand and a rise inspot natural gas prices provided most power dailies in the West with a boostWednesday.

The California ISO predicts Thursday load to peak at40,938 MW, climbing by more than 2,600 MW from Wednesday. Reflecting the robustdemand, South Path-15 added about $2 in the high $30s while North Path-15gained less than a dollar in the mid-$30s. Values in the Northwest leaned flatto higher as power at Mid-Columbia increased by around a dollar in the mid- tohigh $20s, while COB deals were flat to Tuesday in the low $30s. In theSouthwest, Palo Verde noted a premium of more than a dollar as power was exchangedin the mid-$30s, while Mead trades eased on the session in the mid- to high$30s.

Midwestdailies mixed with choppy demand

Conflicting cues from varied Thursday demandprojections sent power prices in the Midwest moving in different directionsWednesday, with support from modest gains in spot natural gas hubs helping tocutback some losses.

Power at PJM AEP-Dayton was traded around a dollarhigher in the high $40s, while losses of roughly $2 gripped deals at MISOIndiana which were seen in the high $30s.

The PJM AEP region expects Thursday load to crest at20,843 MW, shedding more than 500 MW from Wednesday while the PJM ComEd regionpredicts peak load to hit 19,081 MW on Thursday, adding about 400 MW from themidweek.

Market prices and included industry data are currentas of the time of publication and are subject to change. For more detailedmarket data, including power, naturalgas and coal indexprices, as well as forwards and futures,visit our Commodities Pages.