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AM Power Report: Prices could stumble as traders eye declining demand

Powervalues at theday-ahead markets could flounder Thursday, April 14, as pressure from prospectsfor demand weakness across the bulk of the country at the close of the workweekcombine with the recent lackluster trading activity at the natural gas futurescomplex.

in the priorsession, front-month May natural gas futures were extending a tad lower in overnighttrade, moving most recently at $2.029/MMBtu, off just 0.7 cent ahead of theopening bell as the market takes pause ahead of the midmorning release ofweekly storage data. Marketoutlooks for the report are calling for a slight withdrawal ofabout 1 Bcf for the week ended April 8. Nonetheless, supply remains more thanample overall, with total working gas currently sitting at a freshend-of-withdrawal-season-high of 2,480 Bcf.

Lookingat demand, forecasts suggest diminished load in much of the country at theclose of the workweek, when business-related demand typically wanes movingcloser to the weekend break.

Inthe Northeast, demand in New England could reach highs at 14,500 MW on Thursdayand 13,950 MW on Friday, while New York load could peak at 18,177 MW onThursday and 17,354 MW on Friday. To the south, demand in the PJM Westernregion could hit a high at 48,653 MW on Thursday and 46,212 MW at the end ofthe business week, while PJM Mid-Atlantic load could top out at 30,964 MW onThursday and 30,025 MW on Friday.

Inthe Midwest, the PJM Interconnection sees demand in the PJM AEP region crestingat 16,131 MW on Thursday and 15,199 MW on Friday, while PJM ComEd load isexpected to see highs at 11,314 MW on Thursday and 10,916 MW at the close ofthe workweek.

Inthe South, load in ERCOT will likely touch a high near 39,358 MW on Thursdayand 39,924 MW on Friday, running against the wider decline.

Inthe West, CAISO demand is called to reach 27,830 MW on Thursday and 27,000 MWon Friday, which should exert pressure on power dailies in the region Thursdayamid the typical revised trading schedule featuring two-day partly weekendproducts for Friday-Saturday delivery.

Inforward action, the price of power for May delivery had a weak showing in muchof the country April 13, as forecasts for warming in the midrange that spelledlackluster demand in the coming weeks reflected more on values at mostlocations than did ongoing gains at the natural gas futures arena that drovefueling costs higher.

Inthe East, front-month power values slumped by about 60 cents to near $33 atNEPOOL-Mass and fell by more than $1 to roughly $35 at PJM West, as powerprices for June spanned the low to mid-$30s in New England and the high $30s atPJM West.

Inthe Midwest, a near 70-cent decline goosed prompt-month power deals to around$29 at PJM Northern Illinois, as losses of about 60 cents steered month-aheadpower transactions to indexes at almost $33 at PJM AD and atop $30 at MISO Indiana.Along the forward curve, trades for June power delivery across the three hubswere likewise assessed in the high $20s to the low $30s.

Inthe South, power parcels for May at the ERCOT markets shed about 40 centsacross the board in deals averaging between $23 and $26, while power productsfor delivery further out to June across the region were transacted in the high$20s to the low $30s.

Inthe West, California saw price activity for May power deflate by roughly 30cents to almost $24 at North Path-15 and ease by 5 cents to near $20 at SouthPath-15, as Mid-Columbia May advanced by 30 cents against the wider decline toaverage at about $12 and Palo Verde May rose by 25 cents to an index at around$19. Looking ahead, power pricing for June was spread in the high $10s atMid-Columbia and in the low to mid-$20s elsewhere in the region.

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Marketprices and included industry data are current as of the time of publication andare subject to change. For more detailed market data, including power andnatural gasindex prices, as well as forwards and futures, visitour Commodities Pages.