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Rising demand, gas gains lift daily power prices


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Rising demand, gas gains lift daily power prices

After moving mixed the day prior, next-day power markets in the U.S. were higher Tuesday, Aug. 8, as traders looked toward outlooks calling for elevated midweek demand alongside firm gas prices.

In the natural gas futures arena, technical buying allowed the front-month September contract to close the session 2.1 cents higher at $2.822/MMBtu. In addition, spot gas markets responded to expectations of increased demand and traded at modest premiums, with the exception of deals done at Tetco M3.

Taking a look at the supply of nuclear generation, total U.S. nuclear plant availability rebounded to 96.07% early Aug. 8.

West dailies backed up by demand forecasts, higher gas prices

On-peak power values in the West took a few steps forward Tuesday with most markets inspired by firm load forecasts and support from rising gas prices.

In the Southwest, power prices at Palo Verde and Mead were up about $6 from Monday and ranged in the high $40s to low $50s at the former and the low $50s at the latter.

In the Northwest, Mid-Columbia on-peak deals added around $4 and were done in the mid-$40s to high $50s, while the California-Oregon Border hub saw trades posted in the high $40s to low $50s, increasing by roughly $8 on the session.

In California, South Path-15 on-peak transactions were up almost $2 in the low to mid-$40s. The California ISO is calling for demand to reach 40,319 MW on Tuesday and 40,336 MW on Wednesday.

Texas values rise with load, gas gains

Power markets in Texas notched gains Tuesday owing to forecasts for strong midweek demand and elevated spot gas prices.

The Electric Reliability Council of Texas is calling for load to touch 57,537 MW on Tuesday and 60,835 MW on Wednesday. Inspired by demand, next-day deals at ERCOT North were up more than $3 from Monday and were done in the low $30s.

Day-ahead deals also saw modest increases of $1 to $2 from Monday with ERCOT Houston, ERCOT North, ERCOT South and ERCOT West averaging $31.36, $29.59, $30.61 and $29.69, respectively.

East markets firm with demand

Outlooks suggesting strong midweek demand countered mixed spot gas prices and helped power dailies in the East stay on the positive side of the ledger Tuesday.

At next-day markets, the New England Mass hub saw deals in the mid- to high $20s, up about a dollar from Monday, while PJM West trades were little changed on the session and were pegged in the high $20s.

Flat to higher moves were seen at day-ahead markets. The Mass hub and New York Zone A added $3 to $5 on the session with deals averaging $26.61 and $33.26, respectively, while New York Zone G and New York Zone J transactions added less than $1 and averaged $28.43 and $29.64, respectively.

Grid operators in the region are calling for elevated demand by the midweek. New England load is called to hit 16,800 MW on Tuesday and 18,680 MW on Wednesday, while New York demand may near 21,501 MW on Tuesday and 22,368 MW on Wednesday. The PJM Mid-Atlantic region is expecting load to top out at 37,231 MW on Tuesday and 40,399 MW on Wednesday, while the PJM Western region should see demand crest at 56,670 MW on Tuesday and 59,912 MW on Wednesday.

Midwest markets supported ahead of midweek

A combination of robust demand forecasts and modest gains in spot gas prices supported power packages in the Midwest on Tuesday.

The PJM AEP region is expected to see load peak at 16,943 MW on Tuesday and 17,653 MW on Wednesday, while the PJM ComEd region should see highs of 14,534 MW on Tuesday and 15,358 MW on Wednesday.

Gains of 2 cents to 3 cents were noted for gas deals at Chicago Citygates and NNG Demarc with packages averaging around $2.70/MMBtu at the former and slightly above $2.60/MMBtu at the latter.

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.