The price of next-day power across the U.S. pulled mostly lower Thursday, Dec. 28, as expectations for generally weaker load at the close of the abbreviated workweek outweighed ongoing gains in natural gas futures trading.
Lending support, natural gas futures extended gains overnight with an additional push higher mid-morning after weekly data from the U.S. government detailed a near-average and mostly expected withdrawal of 112 Bcf in the week ended Dec. 22.
NYMEX February 2018 natural gas hit a three-week high of $2.945/MMBtu, and settled 18.2 cents higher day on day at $2.914/MMBtu, up 26.0 cents, or almost 10%, in the past two sessions.
Cash gas prices also moved mostly higher, adding 25 cents or more throughout most of the U.S.
However, on the demand side, most grid operators across the country see diminished load at the close of the truncated workweek, despite frigid cold gripping most of the Midwest and eastern U.S., as business-related demand is expected to taper off approaching the New Year's weekend break.
Northeast prices hold above $100 as frigid cold lingers
While the expectation of declining business-related demand ahead of the holiday weekend helped to deflate some eastern U.S. power markets, prices remained high as frigid weather remains locked in the five-day weather outlook.
In the Northeast, New England Mass hub next-day power traded in a wide range from the mid-$160s to the mid-$180s but was down more than $20 overall with an average near $170. PJM West in the mid-Atlantic was pegged at a relative bargain near $115, flat day on day.
Day-ahead markets also held above $100. Mass hub averaged above $175 while New York markets ranged from near $110 in Zone A to near $140 in Zones G and J.
Demand in New England is expected to crest at 19,540 MW on Friday, down more than 800 MW from Thursday's forecast high, while load in New York is projected to reach 22,781 MW on Friday, off about 500 MW on the day. Farther south, PJM Western region load is seen peaking at 63,027 MW on Friday, a day-on-day decline of 2,800 MW, while PJM Mid-Atlantic demand should peak near 43,522 MW on Friday, off about 1,000 MW on the day.
Midwest markets step lower with demand outlook
Despite lingering cold weather, the price of next-day power in the Midwest stepped lower Thursday in tandem with load forecasts.
Dailies at the MISO Indiana hub were pegged in the low to mid-$40s, off $1 or $2 on the day. Showing sympathy with stronger prices to the east, the PJM day-ahead market was higher-priced with averages of $79.09 at the AEP-Dayton hub and $74.11 at the Northern Illinois market.
Demand in the PJM AEP region is called to reach 20,557 MW on Friday, about 1,000 MW below Thursday's projected peak, while load in PJM ComEd is forecast to reach 14,219 MW on Friday, down about 500 MW on the day.
Texas markets deflate with load outlook
The price of day-ahead power throughout the Electric Reliability Council of Texas deflated $2 to $3 on Thursday in tandem with a sinking load forecast.
Day-ahead prices averaged anywhere from $22.33 at ERCOT Houston and $23.51 at ERCOT North to $23.61 at ERCOT West and $25.22 at ERCOT South.
ERCOT demand should reach a high near 47,880 MW on Friday, down almost 2,000 MW on the day.
Revised products trade lower in the West
Reflecting a revision in trading products, next-day power deals in the western U.S. were done at a loss Thursday.
In an effort to cover positions ahead of the end of the year and the long New Year's weekend, deals in the West on Thursday were done for delivery on Saturday, Dec. 30, which also brought an expected drop in demand.
California load is poised to top out at 29,249 MW on Thursday and 28,272 MW on Friday before likely dropping even further by Saturday amid the usual decline in commercial and industrial demand during the long holiday weekend.
In the Northwest, Mid-Columbia deals were done in the low to mid-$20s, off about $2 on the day, while trades at the California-Oregon Border hub were done in the mid-$20s, off more than $3.
In the Southwest, Mead prices fell about $4 on the day but remained about $2 above Palo Verde on average with both markets pegged in the mid-$20s.
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.