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AM Power Report: Dailies could meander amid varying fundamentals


According to Market Intelligence, December 2022


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AM Power Report: Dailies could meander amid varying fundamentals

Price activity for power dailies could be choppy Thursday, Oct. 12, as mixed demand prospects for the close of the workweek combine with recent volatility in natural gas futures.

Declining 2.0 cent in the prior trading day, NYMEX front-month natural gas futures were moving higher early Thursday. At 6:30 a.m. ET, the November natural gas futures contract was up 1.4 cents to trade at $2.903/MMBtu on light short covering ahead of the midmorning release of the latest round of weekly storage data.

Analysts and traders expect the U.S. Energy Information Administration's storage report will detail a 77-Bcf to 91-Bcf injection for the week ended Oct. 6, with an average addition of 84 Bcf eyed. The figure will compare to the respective year-ago and five-year average injections of 79 Bcf and 87 Bcf.

In terms of demand, outlooks point to varied load at the close of the workweek.

In the Northeast, grid operators see declining load, as demand in New England is expected to top out at 14,620 MW on Thursday and 14,150 MW on Friday, while load in New York is forecast to peak at 18,420 MW on Thursday and 17,963 MW on Friday. To the south, PJM Western region load could show a modest uptick as it is projected to crest at 47,664 MW on Thursday and 47,701 MW on Friday, while PJM Mid-Atlantic demand is poised to slacken as it is called to reach 32,355 MW on Thursday and 30,127 MW on Friday.

In the Midwest, load in the PJM AEP region is seen deflating slightly to hit highs at 14,864 MW on Thursday and 14,801 MW at the end of the business week, while load in PJM ComEd is expected to climb to highs at 11,358 MW on Thursday and 11,557 MW on Friday.

In the South, Texas demand is projected to touch a high near 52,872 MW on Thursday and 56,520 MW on Friday, joining the uptrend.

In the West, load in California should near 28,870 MW on Thursday and 28,500 MW at the close of the workweek, which should exert pressure on power dailies in the region Thursday, as traders book revised partly weekend products for Friday-Saturday delivery.

In forward action, the power offering for November added value across the bulk of the country at midweek, as front-month natural gas futures rose early in the session to suggest an uptick in fueling costs before ultimately ending the day almost unchanged.

In the East, November power trades tacked on between 20 cents and 30 cents to average at about $35 in New England and atop $33 at PJM West. Further along the forward curve, power deals for December were assessed in the mid- to high $50s in New England and in the high $30s at PJM West.

In the Midwest, prompt-month power values rose by nearly 50 cents to an index close to $34 at PJM AD but deflated by almost 30 cents to an index near $31 at PJM Northern Illinois. MISO Indiana front-month pricing advanced by around 10 cents to an index at approximately $35. Power prices for December spanned the low to high $30s overall.

In the South, gains on either side of 20 cents at the ERCOT markets took pricing for November power to indexes ranging roughly from $20 to $29. Regional price activity for December power delivery was likewise spread in the low to high $20s.

In the West, California saw front-month power transactions pick up about 50 cents to average near $39 at North Path-15 and $36 at South Path-15, as similar trades advanced by almost 20 cents to an index atop $25 at Mid-Columbia but fell by around 40 cents to an index close to $27 at Palo Verde. Deals for December power were done in the high $30s in California and in the high $20s to the low $30s 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.